Sit with that for a second. The arena experience that anchors the cultural mythology of basketball reaches one fan in a hundred. The other 99 live with their teams somewhere else. Increasingly, that somewhere else is a video game.

I left the conference convinced that the conventional sports marketing playbook is being quietly retired. The new playbook treats games as the primary venue of fandom, treats athletes as full-time content partners, and treats commerce as a closed-loop function of the experience itself. Two iicon panels and a fresh report from EMARKETER, “From fan to cart: Why sports fandom has become a direct path to purchase,” put the architecture in plain view.

Sports fandom now lives where the brand and the league activate together, and games sit at the center of that activation. The brands building for this reality are turning fan emotion into measurable commerce, with new tools to close the loop from identification to purchase.

The NBA, 2K, and the Video Game as the League’s Living Room

The NBA and Take-Two’s 2K shared the iicon stage to talk about a partnership that has quietly become one of the most important brand-distribution channels in professional sports.

Crystal MacKenzie, VP of Global Marketing at NBA 2K, framed the strategic stakes plainly. For a huge share of the global fanbase, NBA 2K is the first touchpoint with the league. A teenager in Manila or São Paulo discovers Anthony Edwards through the controller, then graduates to highlight reels, jersey purchases, and live streams. The game is the gateway, and the gateway is wide.

That makes 2K’s authenticity obsession a strategic asset. The game strives to be the most accurate representation of the actual league, allowing fans to experience and identify with their teams and individual athletes. Player likenesses, signature moves, arena audio, broadcast presentation, all of it has to feel like the real thing. Authenticity earns the right to be the league’s facsimile.

O’Keeffe pointed to live service as the multiplier. In-game events, merchandise drops, and seasonal moments timed to the actual NBA calendar give the league an always-on amplification channel. When a marquee trade happens, 2K reflects it. When the All-Star Game arrives, the game runs themed events. The boundary between watching the league and playing the league is dissolving in real time.

The implication for brands is direct. If 99% of fans never see a live game, your activation strategy needs to reach them where they actually are. A 30-second TV spot during the playoffs is one channel. The video game where the same fan spends hundreds of hours a year is another, and it carries a fundamentally different relationship.

Adidas + Roblox: The Authenticity Test in Action

The Roblox-Adidas panel, featuring Phillip Waller, SVP of Brand Development and GM of Gaming, and Thomas Wehner, Head of Gaming, at Adidas, was the most operationally useful conversation I attended at iicon. It revealed how a global brand actually shows up in a gaming environment without alienating the audience.

Waller opened with two numbers that should be on every sports marketer’s wall. Kids spend an average of 2.5 hours per day on Roblox. And 45% of time spent on sports games inside Roblox happens outside the official season of the actual sport. Sports fandom in this environment is no longer seasonal, and it’s no longer bounded by the official calendar at all.

The structural choice Adidas made is worth studying. The company’s gaming division sits inside business development rather than marketing. Waller explained the reasoning at iicon: anchoring in business development gives the team flexibility on creative and production decisions, keeps them close to the consumer, and lets them experiment without the campaign timelines and KPIs that constrain a typical marketing function. That’s a structural insight most brands haven’t internalized.

His operating principle was direct. “If we can’t add value, we’re not doing it.” Adidas has declined a long list of publisher offers because the fit wasn’t right. The discipline of saying no is the discipline that earns credibility with players.

In the early phase, Adidas deliberately stayed away from heavy tracking. The goal was learning rather than optimizing. The team needed to understand the cultural grammar of the platform before measuring against it. As the work matured, the critical metric for Roblox activations became users’ willingness to spend in-game Robux currency on Adidas items. A free skin offers no signal of value. A paid skin proves the brand earned the consumer’s scarcest resource: their game economy.

Waller’s two pieces of advice for any brand thinking about gaming activation are worth remembering. First, connect your brand DNA to the DNA of the game. The activation has to feel native to the platform, the players, and the moment. Second, avoid building your own worlds from scratch unless you’re already in the world-building business. Learn first with smaller, lower-stakes projects, then scale what proves out and identify your best long-term fit inside gaming.

The Macro Picture: Athletes Have Become the Channel

The iicon insights snap into focus once you overlay them on the EMARKETER data. The report’s core finding is that individual athletes drive purchases that team loyalty alone cannot explain.

A YouGov survey of more than 900 US sports fans found that 25% have bought a team jersey primarily because of a specific athlete. Among 35-to-54-year-olds, the demographic with the most disposable income, that figure climbs to 28%. 10% of fans have bought merchandise for a team they don’t support because of a single player. 8% have purchased products specifically because an athlete recommended them.

Social media has accelerated the shift. 46% of US sports fans follow sports influencers, and the number jumps to 57% among Gen Z, per IBM data cited by EMARKETER. The economics are hard to argue with: NIL student-athletes are posting a 5.6% engagement rate, 3.7 times higher than the 1.9% rate of traditional influencers, according to Opendorse. College sports sponsorships now outperform Super Bowl ads in brand recall at a fraction of the cost. A college playoff ad runs around $2 million versus $8 million for a 30-second Super Bowl spot, per Yahoo Sports.

The audience is enormous and concentrated. EMARKETER projects 164.7 million US fans will tune into live sports broadcasts in 2026, with the FIFA World Cup added to a packed Olympics year. The fan is reachable, the data is rich, and the conversion is closer than ever.

Commerce Media Is Closing the Loop

The most underappreciated shift in the EMARKETER report is the rise of sports-specific commerce media networks. Sports retailers are turning their first-party fan data into ad businesses, creating a category that didn’t exist five years ago.

Fanatics launched Fanatics Advertising in August 2025, with two ad networks running underneath it. The company posted $8.1 billion in revenue in 2024, up 15% year over year, with collectibles growing 40% to $1.6 billion, per Sportico. Jeremi Gorman, the former Netflix and Snap executive Fanatics hired as chief revenue officer, framed the value proposition pointedly: “Sponsoring a team is very expensive. Sponsoring a league is even more expensive. But that doesn’t mean brands don’t want to reach sports fans.” Non-endemic advertisers, brands that don’t sell on Fanatics, already account for the majority of the division’s revenue.

Dick’s Sporting Goods is running a similar play. The Dick’s Media network spans 850-plus stores across 47 states, with in-store media in its 100,000-square-foot House of Sport concept locations expanding to 50 by the end of 2026. The technology layer is what makes it more than a branding exercise. Radar and RFID track product pickups and visitor interactions, mapping them to sales. An Adidas campaign for the AE2 basketball shoe, endorsed by Anthony Edwards, used magnetic shelves to trigger nearby screens with Edwards content the moment a shopper picked up the shoe. 80% of Dick’s online orders fulfill from stores. 65% of 2024 sales came from omnichannel customers. The closed loop between in-store ad exposure and purchase is real.

The macro context: commerce media represented 19.5% of US digital ad spend in 2025 and is projected to reach 23.3% by 2029, per EMARKETER’s forecast. Sports-focused retailers with high-intent shoppers and rich first-party data are positioned to capture an outsized share.

What Brand and Strategy Leaders Should Do Now

Five operating principles emerge when you stack the iicon panels against the EMARKETER data.

Anchor your gaming work in business strategy rather than marketing campaigns. Adidas’s decision to house its gaming division inside business development is a structural choice with cultural consequences. It changes the time horizon, the metrics, and the cultural posture of the team. Brands that bolt gaming onto a marketing P&L will keep producing one-off activations that fail to compound.

Match brand DNA to game DNA before doing anything else. Waller’s principle protects the player relationship, and the player relationship is the entire asset. If your brand cannot bring genuine value into a world, stay out of that world.

Treat athletes as long-term content partners. The EMARKETER data is unambiguous: athletes drive purchase behavior more reliably than team loyalty does. NIL economics are turning college athletes into engagement engines that outperform traditional creators by 3.7x. The brands signing multi-year, content-led deals will compound advantage over time.

Use leagues and games as distribution. The NBA-2K relationship is a distribution channel for the league’s IP into 99% of its fanbase. A brand partnership inside that channel reaches a different fan, in a different mood, in a different transaction context than a courtside placement does.

Layer commerce media on top of every activation. Fanatics Advertising and the Dick’s Media network are turning fandom into measurable purchase intent. Non-endemic brands can now reach sports fans at the moment of purchase without paying for an official sponsorship. The cost of entry is lower, the measurement is sharper, and the loop closes inside the same shopping session.

The Real Stadium Has Already Moved

iicon 2026 made one thing inescapable. The center of gravity of sports fandom has shifted off the field and into the games, the feeds, the platforms, and the carts where fans actually live their relationship with the league.

99% of NBA fans never make it to a live game. 45% of Roblox sports gameplay happens off-season. Athletes drive purchase decisions that team loyalty alone cannot explain. Commerce media is on track to claim nearly a quarter of US digital ad spend.

The brands that build for this reality will own the next decade of sports fandom. Everyone else will keep paying more for less.

How is your brand thinking about the shift from stadium-and-broadcast to game-and-commerce? Where are you seeing the strongest signals of the new playbook? Let me know in the comments.

Technically Entertaining is your front-row seat to the convergence of gaming, technology, and entertainment, written for the brand and strategy leaders shaping what comes next. If you found this useful, subscribe to get every issue delivered to your inbox.

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Make no mistake: this first edition has clear opportunities to evolve in future iterations. The foundation, however, is undeniable. From EA CEO Andrew Wilson taking the main stage to skateboarding legend Tony Hawk holding court, iicon 2026 already feels like a fixture on the calendar.

I had the privilege of delivering a keynote on my book Press Play, walking through how brands can seize the generational opportunity that video games represent. More on that toward the end. First, let me share what I took away from the conversations that defined the event.

Here’s the bigger picture: every major media, tech, and consumer business in the room is making the same bet at the same time. Gaming has become the connective tissue of the next decade of entertainment.

Andrew Wilson on the Golden Age of Entertainment

EA’s Andrew Wilson opened the conference with a thesis that framed the entire two days. “We live in the golden age of entertainment.” The world sits at a critical technological inflection point, and in his view, game developers and publishers “have to be deliberate about it.”

Wilson projects the global gamer population will reach 5 billion within the next decade. Think about that scale for a moment. More than half the humans alive will be gamers.

Scale is only half the story. Wilson’s vision for the future of entertainment centers on worlds built around IP, with multi-modal forms of content and engagement. Active consumption, passive consumption, social play, short form, long form. Each format has a reason to exist because each caters to a different consumer need at a different moment in their day.

For brands, the implication is clear. The battle has shifted from owning a single touchpoint to showing up across the full surface area of a fan’s relationship with a piece of IP.

Take-Two’s Strauss Zelnick on GTA VI and Brand Partnerships

The most anticipated entertainment release of the decade is still on track. Grand Theft Auto VI is set to launch in November this year, and Take-Two CEO Strauss Zelnick was the most pressed executive at the event.

When asked when the marketing campaign would begin, Zelnick offered the kind of answer only he can deliver. “Soon.”

What he was willing to discuss: brand partnerships. Take-Two will be highly selective about which brands enter the GTA VI universe.

“We need to stay true to the underlying franchise and our players, because they have a sixth sense for when things are off.”

That sixth sense is the thing brands need to internalize. Players have been trained over decades to detect inauthentic intrusion. The bar for partnership in a franchise of this magnitude has never been higher.

Zelnick did open another door. Take-Two’s mobile arm Zynga is coming off a stellar year, and with mobile gaming remaining the fastest-growing segment of the entertainment business, Zynga is well positioned to accelerate by making it easy for brands to embed themselves in mobile titles. Watch this space closely.

Netflix Gaming: The Last Screen Becomes the First Screen

Netflix’s gaming strategy is the most misunderstood narrative in entertainment right now. After a couple of years of public skepticism, the company’s gaming GM Alain Tascan came to iicon to recalibrate the conversation.

Tascan was direct.

“We want to entertain the world. Without gaming, you can’t really fulfill that promise.”

His core insight: consumers increasingly demand convenience and seamless consumption. With Netflix reaching 800 million viewers globally, the strategic goal is to expand fandom through games.

Picture this scenario. You finish the season of your favorite Netflix show. The last screen of the show becomes the first screen of the video game built in that same universe. You stay inside the world. You keep creating, keep exploring, keep paying attention.

Netflix has a fresh batch of original games launching this year. The commitment is real, the budget is real, and the strategic thesis lines up with where consumer behavior is already heading.

Amazon Luna: The Ecosystem Play That Could Finally Land

Amazon arrived at iicon with a message about Luna, its re-released cloud gaming platform. Luna is being positioned as the connective hub between Twitch, Amazon Games, and Amazon Prime, opening cross-pollination of use cases across the Amazon entertainment stack.

The pattern matches what Netflix is building. You watched Invincible, and Luna serves you an offer to play the game. You streamed a Twitch broadcast, and Luna lets you jump into the same title with one click. Prime membership becomes the wrapper that ties it all together.

For brands accustomed to thinking about Amazon as a retail channel, this is a meaningful expansion. The company is building toward a single integrated entertainment ecosystem with games as the engagement engine.

Yahoo! Enters the Chat

I’ll admit it: Yahoo making a serious gaming push was not on my 2026 bingo card.

The numbers tell the story. Yahoo still reaches 250 million users per month. Younger audiences are flowing back to the brand, drawn in by nostalgia and a refreshed product surface. People come for email, news, and finance, and they stay for daily habits.

Games are a natural extension of those habits. Yahoo wants to increase engagement and reach new audiences through games. The early signal is promising: their puzzle title Crushable has seen 120% growth in its daily active user base since launch.

A new slate of original games arrives later this year. The audience is already there. The potential is real.

Press Play: Why Brands Cannot Afford to Sit This Out

In my keynote on Press Play, I left the room with a question I want to leave with you as well. If gaming is going to reach 5 billion people, sit at the center of every major streamer’s growth strategy, define how IP gets monetized, and become the connective tissue between Amazon, Netflix, Yahoo, and every major consumer platform, what is your brand’s position in that world?

The window for figuring this out is closing. The brands that engaged with gaming early, deliberately, and with genuine respect for player communities are now reaping the benefits. The brands still waiting for a clearer signal will find that the signal arrived years ago.

Gaming defines the strategic environment of the next decade. Treat it accordingly.

What This Means for Decision Makers

Five takeaways from iicon 2026 that should land on every CMO’s and brand strategy leader’s desk.

The gaming audience is reaching universal scale. A 5 billion player forecast within the decade demands repositioning at the C-suite level. Working-team curiosity will fall short.

IP-driven worlds are the emerging media format. Wilson, Tascan, Zelnick, and Amazon’s leadership all described the same architecture from different angles. The unit of strategy has shifted from titles to worlds, from campaigns to engagement loops.

Mobile is the fastest pathway in. Zynga’s brand integration roadmap will be one of the most important developments to watch in 2026 and 2027, especially for brands with shorter creative production cycles and direct-to-consumer ambitions.

Player authenticity is the price of entry. Take-Two’s partnership philosophy reflects the rule across the entire industry. The brands that win in gaming look and feel native to the worlds they enter.

Cross-platform ecosystems are crystallizing fast. Amazon, Netflix, and Yahoo are each building stacks where games anchor the engagement loop. The next 18 months will define which ecosystem strategies actually scale.

iicon 2026 was the first edition. Based on the conversations I had with executives across the industry, the next one is going to be unmissable.

What was your biggest takeaway from iicon, or what did you wish had been on the agenda? Let me know in the comments.

Technically Entertaining is your front-row seat to the convergence of gaming, technology, and entertainment, written for the brand and strategy leaders shaping what comes next. If you found this useful, subscribe to get every issue delivered to your inbox.

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Games are still an afterthought. They shouldn’t be.

The gap between where consumers actually spend their time and where brand leaders deploy their budgets is now the single largest strategic blind spot in modern marketing. And that gap is widest in mobile gaming.

The report from EMARKETER and Admazing, published last month, lays out the disconnect in numbers that should make every marketing leader uncomfortable. I’ve been writing about the gaming opportunity for years. This study finally puts the math on the table. It shows marketing leaders still haven’t got the memo.

The 27-12-10 Problem

Let me give you three numbers that, placed side by side, tell the whole story of why most brands are behind the eight ball on gaming.

First: 26.9%. That is the share of total US media ad spend going to social networks in 2026, according to EMARKETER. Out of $463.93 billion in projected total US media ad spend this year, roughly $124.88 billion is headed to Meta, TikTok, X, Snap, LinkedIn, and Pinterest.

Second: 12.5%. That is the share of total time consumers spend on social platforms relative to all their media consumption. EMARKETER expects that gulf to widen.

Third: 10.2%. That is the percentage of marketers who say their organizations regularly use mobile gaming for brand campaigns. One in ten. The other nine sit somewhere on a spectrum of inaction: 37.0% rarely consider it, 28.7% deprioritize it in planning, and over a third of B2B/B2C marketers neither use nor actively consider mobile gaming at all.

Put those three numbers together and the picture is clear. Brands are allocating more than double their audience’s actual attention share to social. They are leaving the channel where the audience increasingly lives almost completely alone.

More than half of the US population, 54.4% according to EMARKETER’s October 2025 forecast, will be a mobile phone gamer in 2026. Mobile gaming is a mass medium. It reaches more Americans than Netflix. More than the NFL. More than any single social platform.

Only 2.1% of total digital ad spend is flowing to it.

Why Brand Leaders Keep Missing This

I have had versions of this conversation with dozens of CMOs, brand directors, and heads of strategy over the past year, at Cannes, at Advertising Week, in private client workshops. The reasons brand leaders stay on the sidelines fall into three categories, and each of them has become outdated.

The first is perception. A lingering assumption, rooted in the early 2010s, pictures gamers as a narrow demographic of young men playing hardcore console titles. That picture has been wrong for at least a decade. Candy Crush, Royal Match, Coin Master, Roblox, and Monopoly Go pulled mobile gaming into the mainstream. Yory Wurmser, Principal Analyst at EMARKETER, put it plainly in the report: “Most people in this country are gamers, as are the majority of internet users worldwide.”

The second is historical measurement weakness. This one had teeth. When Apple rolled out iOS 14.5 in 2021 and deprecated the IDFA, the mobile gaming ad ecosystem effectively had its tracking infrastructure cut off at the knees. Attribution, audience signals, and campaign measurement all took a hit. For two or three years, even marketers who wanted to lean into gaming struggled to prove it worked.

The third is budgetary inertia. Media mix decisions are rarely made from scratch. Last year’s plan becomes this year’s starting point, and social and CTV are already locked into the template. Gaming stays out of the conversation because it was out of last year’s conversation. Only 28.7% of marketers even consider mobile gaming alongside core channels, per the EMARKETER/Admazing survey. The rest treat it as optional, experimental, or invisible.

All three of those reasons have collapsed.

The Measurement Argument Is Over

The biggest structural objection to mobile gaming was always measurement. That objection has been retired.

Last year, the Interactive Advertising Bureau released its Gaming Measurement Framework, giving the industry its first standardized benchmarks for in-game ads, rewarded ads, and interstitial ads. Kantar, Circana, DISQO, and the MRC-accredited measurement vendors have all invested heavily in gaming-specific brand lift and outcomes lift methodologies. The ecosystem has matured.

The results these new tools are producing should stop any skeptical marketing leader in their tracks. Pedro Sánchez López, Senior Director of Brand and Media at Kantar, shared a stat in the EMARKETER report that deserves to be printed on a poster in every CMO’s office: mobile gaming ad campaigns deliver purchase intent 3.5 times stronger than the US norm, with a 7.1 percentage point lift.

Three and a half times the purchase intent lift of the US norm. Let that sink in.

López also tracked a shift I have been seeing anecdotally for years. Consumer receptivity to gaming ads has moved from 25% in 2012 to 54% in 2025. The audience welcomes the ads, provided the ads fit the gameplay moment (the second part - authenticity - is crucial and something most brands get wrong).

Erika Digirolamo, Vice President of Media Solutions at Circana, framed the measurement evolution directly. Measurement quality in mobile gaming has moved from basic awareness and engagement metrics to reliably connecting ad exposure to incremental business outcomes. Circana, Kantar, Nielsen, and ComScore now measure mobile gaming with the same rigor they apply to CTV and linear television.

Attention quality, the metric that has become the new currency of brand media, is where mobile gaming outperforms. 86.1% of marketers in the EMARKETER/Admazing survey called attention quality at least moderately important. Mobile gaming, particularly rewarded video, is engineered for attention. The player opts in. The player receives value. The player watches. Rewarded ads landed as the top-performing format in the survey, with 40.7% of marketers naming it their most successful mobile gaming format.

AI Is Closing the Gap Faster Than Brands Are Catching Up

The measurement argument has closed. The creative argument is closing next.

Generative and agentic AI tools are collapsing the production cost of gaming-native creative. Historically, a brand that wanted to show up in a mobile game needed bespoke creative for playables, rewarded video, and interstitials. That investment made gaming feel like an expensive side quest for most marketing teams.

Eddy Prado, Co-Founder and Chief Product Officer at Admazing, described the shift: “AI is helping mobile gaming align with the standards brand marketers expect: clearer measurement, faster creative iteration, and more disciplined budget allocation.” Wurmser echoed the point from the EMARKETER side. Dynamic creative is getting better and cheaper, and personalization at scale has arrived.

Pair that with what AI is doing on the game development side. Studios are shipping more finely tuned titles faster, which means more inventory. More inventory with better targeting and dynamic creative produces a flywheel. The early brands to scale up their gaming buys are about to have a compounding advantage over the ones still treating the channel as experimental.

The Leaders Are Already In

Some brand leaders are already on the right side of this curve. Wendy’s has spent years building presence inside Fortnite and Twitch, showing up where their Gen Z audience actually is. Walmart and Nike launched experiences inside Roblox that reached tens of millions of young shoppers. Hasbro has leaned into Monopoly Go as a billion-dollar IP extension. Mattel licensed Barbie into Roblox and mobile titles ahead of the movie launch. Chipotle, Chevrolet, Coca-Cola, and Stanley have all run in-game campaigns in the past 18 months, and the measurement reports coming out of those campaigns are what is driving the renewed conversations I am having in boardrooms this year.

Your Game Plan, If You Run Marketing at a Consumer Brand

If you are running marketing, brand, or strategy at a meaningful consumer-facing business, here is what I would do this quarter.

1. Audit your media mix against actual consumer attention. If your share of spend on social exceeds your target audience’s share of time on social by more than 10 percentage points, you have a misallocation problem. Name it and fix it.

2. Carve out an incrementality test budget for mobile gaming, somewhere between 3% and 5% of your digital spend. Leverage tools like Solsten to understand what mobile games your target audience already plays, and how to best show up this in those environments. Partner with a measurement provider like Kantar, Circana, or Nielsen to run a proper brand lift and outcomes lift study against your existing social and CTV buys.

3. Prioritize rewarded video and playable formats for your first wave. They carry the attention quality and creative flexibility that travel cleanly from your existing brand campaigns. Depending on your games of choice, pick a partner. Overwolf and Superleague Gaming are great options.

4. Build an AI-native creative pipeline for gaming. If you are still commissioning gaming creative the way you commissioned a TV spot in 2015, you are leaving the compounding returns on the table. Lean into tools like Elaris that has helped brand leaders increase conversion rates for in-game ads by up to 50%.

The brands that move in 2026 will establish a beachhead before mobile gaming ad inventory gets repriced upward. The ones that wait will pay more for the same audience in 2028.

The disconnect between where consumers spend their time, attention, and dollars, and where brand leaders deploy their budgets, has become indefensible. The data is on the table. The measurement tools are in the market. The audience is waiting inside the games.

The question isn’t whether brands need to shift their budgets to gaming. The question is who will move the fastest and with the most conviction.

Are you meeting your consumers where they actually are, or are you still pouring budget into the platforms that dominated last decade’s media plan? What do you think? Let me know in the comments.

Technically Entertaining is a weekly briefing on how gaming, technology, and entertainment are reshaping brand strategy for decision-makers at the world’s biggest brands. Next week, I’ll be giving a keynote at the iicon conference, where top executives across gaming, entertainment, sports, and brands come together to shape the world of consumer engagement. I’ll be sharing important insights from behind closed doors - so be sure to subscribe below to not miss out.

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Gaming is destroying this assumption in real time.

That’s the opportunity. But there’s a version of the gaming opportunity that brands keep misreading, and I’ve watched some very smart marketing leaders spend very significant budgets on it. Getting this right requires understanding not just why gaming works, but exactly where the current conventional approach breaks down.

Gaming offers something no other medium has ever managed: genuine intimacy at scale. But only if you build it the right way.

What Gaming Does That No Other Medium Can

Start with a question that sounds simple but isn’t: what is the difference between watching a Travis Scott concert and attending one?

In April 2020, 12.3 million people were simultaneously inside Fortnite for his Astronomical event, a Guinness World Record for the largest music concert in a video game. Across all five time-zone-staggered showings, 45.8 million players experienced it. By any traditional media metric, this is a broadcast event. The numbers dwarf most television audiences for live music.

Ask anyone who was there, inside the game rather than watching a stream, and they will describe it the way they describe being somewhere, not watching something. They had a squad. They had a position in the world. When the sky turned inside out and Scott’s giant avatar moved through the landscape, they were moving too. The camera was not fixed. The perspective was theirs.

This is the quality that makes gaming categorically different as a brand medium: it places people in a state of play, and in a state of play, human beings are cognitively and emotionally present in a way that passive consumption cannot replicate. The neuroscience is well-established. Play engages agency, identity, and reward circuits simultaneously. When a brand enters a gaming environment, it becomes part of the world the player is inhabiting.

That is why the Travis Scott event felt intimate despite its scale. That is why Balenciaga’s Fortnite collection launch generated genuine fashion press, not gaming press. That is why Nike’s in-game sneakers are coveted rather than ignored. The brand arrives as something you wear, use, or experience in a context of self-expression and identity. The interaction is personal, mediated by play, even when millions of others are doing the same thing simultaneously.

Scale and intimacy are not a trade-off in gaming. They are features of the same architecture.

Why the Default Approach Is Failing Brands

Here is where I need to be direct, because I think the current standard approach to gaming is producing cautionary tales rather than competitive advantages.

The most common first move for an enterprise brand entering gaming right now is to build an experience on Roblox. I understand why. Roblox has a young, engaged audience, the barrier to entry is relatively low, the press coverage of brand activations is reliable, and it feels like being in the right place at the right time. For some objectives, it makes sense.

But I have spoken directly with a marketing leader at a global beauty brand who told me something that every CMO considering this path should hear. They spent $200,000 on a Roblox integration. When it launched, they received virtually no data from Roblox on who engaged with it, how they engaged, where they came from, or what happened next. Some brand awareness metrics moved. Beyond that, the learnings were nearly zero. The investment, in terms of actionable intelligence about their audience, returned almost nothing.

This is structural, not an execution failure. As Digiday has reported extensively, the lack of third-party measurement on Roblox has been a persistent and growing problem for advertisers, with agency executives finding it increasingly difficult to convince new brands to invest without independent verification of results. Roblox offers first-party data from its own ad server, but there is no Nielsen, no Comscore, no external validation of what the platform claims about your outcomes.

The aggregation trap I described in Part One of this series applies inside gaming too. Roblox needs brands to make its platform feel culturally alive and commercially credible. Sharing meaningful audience data with those brands would reduce their platform dependency. So it doesn’t. The incentives are identical to every other platform aggregator, even if the medium is different.

In case you missed it - Parts One and Two in this series

The beauty brand’s $200,000 bought them a presence. It did not buy them knowledge. And without knowledge, there is no compounding value, no ability to reach those players again, no understanding of who they were, no data to inform the next decision.

What Sega Understands About This Problem

I recently spoke with an executive at Sega, the company behind one of gaming’s most enduring cultural properties: Sonic the Hedgehog. Sonic commands genuine love across generations, an IP with the kind of authentic resonance that most brands spend decades and enormous budgets trying to manufacture.

And yet, from a distribution standpoint, Sega faces a version of the same trap that every brand building on third-party platforms faces. Their games live on PlayStation, Xbox, Nintendo Switch, and Steam. Their relationship with fans is mediated by platform holders who set the terms of discovery, pricing, and access. The IP is exceptional. The ownership of the audience relationship is not.

“IP without distribution is a rented asset. You can build something genuinely beloved and still find yourself dependent on someone else’s willingness to let you reach the people who love it.”

This is the paradox the gaming industry itself is grappling with. It illuminates exactly the right question for any brand operating in this space: what does it mean to own a relationship with your audience, and what are you actually building toward if you don’t?

A Portfolio Framework That Actually Works

Based on my work advising enterprise brands on gaming strategy, here is the framework I believe produces the best outcomes. It is deliberately a portfolio approach, not a single bet.

The first move is to experiment on third-party platforms including Roblox, but with clear-eyed expectations and a data strategy built into the commercial agreement before you sign anything. Negotiate what data you will receive, in what format, and with what frequency. If a platform will not commit to meaningful data sharing in the contract, that tells you something important about the nature of the relationship you are entering. This is not necessarily a reason to walk away, but it is a reason to calibrate your investment accordingly and to be honest internally about what success looks like when learning is structurally constrained.

The second move, and this is where most enterprise brands are significantly underinvesting, is to partner with established mobile game publishers who already have the audience you want to reach. Mobile gaming reaches more people than console and PC combined. Unlike Roblox or Fortnite, a partnership with a mobile game publisher can be structured as a commercial deal where data access is a negotiable term. You are agreeing to terms, not accepting platform defaults. That distinction is significant. It means you can require, as a condition of the partnership, that you receive player data that makes the investment meaningful: purchase intent signals, cohort behaviour, retention patterns. The kind of intelligence that tells you whether your brand changed anything, not just whether people saw it.

The third move is the most strategically important, and the one that most directly addresses the aggregation problem: use your own brand and IP to build games or gamified content for the audiences you already reach. This is a call to stop treating games as someone else’s medium and start treating your brand as the platform. If you have an existing direct audience through email, through loyalty programmes, through owned communities, you have the foundation for a gaming experience that you control, that generates data you own, and that deepens relationships with people already invested in your brand. The intimacy is real because the relationship pre-exists the game. The data is yours because you built the environment.

This is the thread connecting back to the broader series argument. The brands that escape the aggregation trap are not necessarily the ones with the biggest budgets. They are the ones that recognise their existing owned audience as the most valuable starting point, and invest in deepening those relationships through experiences that cannot be intermediated by anyone else.

The Standard Every Brand Should Hold Itself To

Gaming represents one powerful expression of something more fundamental: the shift from renting attention to building relationships. The brands that understand gaming understand this instinctively, because gaming makes it impossible to hide behind impression counts and reach metrics. Either the player is engaged, actively, willingly, on their own terms, or they are not.

That standard: genuine, chosen engagement from an audience that knows what it is doing when it shows up, is the standard every brand should hold its entire distribution strategy to. In games. In everything.

The platform trap is real. The acquisition playbook, as I described in Part Two, is available at various scales to anyone willing to think structurally about distribution. The intimacy at scale that gaming demonstrates is achievable. But only if you build it the right way, own the data that comes from it, and resist the temptation to confuse a presence on someone else’s platform for a relationship of your own.

Are you applying the same scrutiny to your gaming investments that you would apply to any other major marketing commitment? What would your data tell you if you asked? Let me know in the comments.

Technically Entertaining covers business strategy at the intersection of gaming, technology, and entertainment. This is Part Three of a three-part series on brand distribution, audience ownership, and the future of the attention economy. If this was forwarded to you, subscribe below to get every future issue directly.

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In case you missed it - Part One of Three

The natural response to that argument is: fine, so what does the alternative actually look like?

The answer is becoming clearer, and it looks less like a content strategy and more like an acquisition strategy. The most strategically sophisticated organisations operating right now are buying direct lines to audiences that no platform can intermediate. They are purchasing the doorway, not just what’s behind it.

Three organisations have demonstrated this clearly, across three different industries, with three very different acquisition targets. The logic underneath all of them is identical.

Case Study One: The New York Times Buys a Daily Ritual

When the New York Times acquired Wordle in January 2022 for a price reported to be in the low seven figures, the coverage largely framed it as a quirky cultural moment. A newspaper, struggling with the existential pressures facing legacy media, buys a word game that had gone viral. The strategic significance was largely missed.

What the Times purchased was not a game. It was a daily ritual shared by tens of millions of people who had never previously had a reason to visit a New York Times product. Wordle gave the company something that subscription marketing cannot buy and advertising cannot manufacture: habitual, direct contact with a new audience at a moment of their day when they were already engaged, already open, and already forming a behavioural pattern around the experience.

The strategic sequel is the more important part of this story. Wordle became the entry point to a broader Times Games ecosystem, alongside Connections, Spelling Bee, and the Mini Crossword, that has become a powerful engine for subscription conversion. The Times is selling a daily habit that, over time, makes the broader Times offering feel indispensable. They built a conversion funnel by buying a ritual.

The platform cannot disintermediate that. There is no algorithm between the Times and its puzzle player. The relationship is direct, daily, and owned. It’s been the most powerful driver of digital revenue growth and subscriber stickiness for the Times that I dedicated an entire section to them in my book on gaming strategies for brands.

Case Study Two: OpenAI Buys a Voice in the Conversation

OpenAI’s acquisition of TBPN, announced in April 2026, looks unusual on the surface. An artificial intelligence laboratory buying a daily tech talk show. The strategic logic becomes obvious once you stop thinking about TBPN as media and start thinking about it as distribution infrastructure for narrative control.

OpenAI is operating in the middle of one of the most contested reputation battles in the history of technology: a fight over what artificial general intelligence means, who benefits from it, who is harmed by it, and who should be trusted to build it. Every major publication, every tech commentator, every YouTube channel with an opinion has a platform from which to shape that narrative. Before TBPN, OpenAI had to rely on earned coverage, which means relying on editors, journalists, and algorithm decisions made by platforms it doesn’t control.

TBPN changes that. The show generated approximately $5 million in advertising revenue in 2025 and was on track to exceed $30 million this year, according to reporting from TechCrunch. That tells you something significant about the audience’s size and quality. More importantly, it gives OpenAI a direct audio channel into the ears of the founder and operator class that shapes tech culture. No editorial filter. No algorithm. No platform that could bury or amplify coverage based on its own commercial incentives.

“Narrative is a competitive asset. Relying on third-party media to carry your story is a form of distribution risk.”

This move echoes something Andreessen Horowitz has been building systematically for years. a16z has constructed a media infrastructure: podcasts, newsletters, and a media fellowship that trained 65 storytellers in its inaugural cohort, with a second cohort launching in April 2026. The goal is direct access to an audience of founders and operators who subscribe. If a16z’s views on tech regulation, AI, or cryptocurrency are filtered through a reporter who frames them differently, that is a loss. If they publish directly to the people who matter to their business, that is leverage.

This is a distribution ownership strategy wearing media’s clothes. The distinction matters.

Case Study Three: Disney Buys a World

The most ambitious articulation of this thesis involves two of the most recognisable names in entertainment.

In February 2024, Disney invested $1.5 billion to acquire an equity stake in Epic Games, the company behind Fortnite, and announced a multiyear partnership to build what they described as an “expansive and open games and entertainment universe.” On paper, this looks like a content deal: Disney IP inside an Epic platform. Marvel characters in Fortnite. Star Wars experiences. Avatar activations. That reading is too narrow.

Fortnite has over 300 million registered users and a cultural gravity that makes it a persistent social space, somewhere people inhabit regularly and with genuine emotional investment. Unreal Engine is the infrastructure layer powering a growing proportion of interactive entertainment globally. Epic Online Services provides identity, social graph, and cross-platform connectivity for millions of players across dozens of titles.

Disney, meanwhile, owns the most powerful IP portfolio in the history of entertainment (Marvel, Star Wars, Pixar, Disney Animation, Avatar) and distributes it almost entirely through platforms and theatres it doesn’t control. Disney+ is the closest thing to owned distribution the company has, and it has faced sustained commercial pressure as the streaming wars have matured. In cinemas, in streaming, in social media: Disney is a content creator dependent on aggregators for reach.

The Epic stake changes that strategic frame. Follow the logic of this partnership to its conclusion, and you arrive at a scenario where Disney owns the interactive world that hundreds of millions of people inhabit. A persistent digital environment where the next generation of fans grows up alongside Disney IP as something they do, rather than something they watch.

That is the escape from aggregation at its most complete. Disney would own the platform where the relationship between its characters and the next generation of fans is formed. No streaming deal. No algorithm. No theatrical window to negotiate.

Why Disney Should Acquire Epic Games

The Common Thread

Three case studies, three different industries, three very different acquisition targets. The logic underneath all of them is identical.

Wordle is a daily ritual. TBPN is a direct audio channel into the founder class. Fortnite is a persistent social world with 300 million registered users. None of these can be intermediated by a third-party platform. None of them can be algorithmically deprioritised. None of them can have their reach revised downward in the next quarterly update.

What all three organisations did was stop thinking about distribution as a function of content strategy and start thinking about it as infrastructure. The question they asked was not about creative quality or channel mix. It was this: what do we need to own in order to reach the people we want to reach, without asking anyone’s permission?

That question is available to every brand to ask. The answer will look different depending on your category, your audience, and your resources. But the framing is universal. The brands that win the next decade will be the ones that understood, early enough, that the platform is the prize.

The next question is obvious: what does this look like when you don’t have $1.5 billion to spend on a games company? That’s the third piece.

Where does acquisition-led distribution thinking fit inside your organisation’s strategy today? Is it even a conversation at the leadership level? Let me know in the comments.

Technically Entertaining covers business strategy at the intersection of gaming, technology, and entertainment. If this was forwarded to you, subscribe below to get every issue directly.

This is Part Two of a three-part series on brand distribution, audience ownership, and the future of the attention economy. Subscribe today to receive the entire series straight to your inbox.

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I’ve spent years working with some of the world’s most recognised brands on their audience and distribution strategies. The single most dangerous misconception I encounter is the belief that building an audience on a platform is the same as owning one. It isn’t. And if the events of the last few years haven’t made that clear, the next few years will.

The follower count is a dependency, owned entirely by someone else, on terms set by someone else. And those terms can change overnight.

“The greatest trick platforms ever pulled was convincing brands that reach was the same as relationship.”

What Your Social Following Actually Is

Let me be direct about what your Instagram following actually is. It is a list of people who, at some point, pressed a button on a platform that doesn’t belong to you. They receive your content at a frequency the platform decides, in a format the platform chooses, delivered to a percentage of them the platform controls. You have zero obligation from the platform to tell you who they are, what they want, or where they go when they leave.

You are borrowing a relationship, on terms set by someone else.

Those terms have changed overnight. Repeatedly. Facebook’s organic reach collapsed from roughly 16% in 2012 to under 6% by 2014, a change that wiped out years of audience-building investment for thousands of brands in a single algorithm update. TikTok’s ban scare in early 2025 was a different kind of wake-up call. For a few days, brands with millions of followers confronted a very simple question: if this platform disappears tomorrow, how do I reach these people? The answer, for almost every brand, was the same. They couldn’t. Because they didn’t have email addresses. They didn’t have phone numbers. They had a follower count, and follower counts are not portable.

This is a structural feature of how these platforms are designed to work. It is not an oversight.

Why the Trap Is Built Into the Business Model

In 2015, technology strategist Ben Thompson published what has become one of the most useful frameworks for understanding how digital platforms accumulate power. He called it Aggregation Theory.

The core argument: in the internet era, the companies that win are the ones that control demand rather than supply. Aggregators (Google, Meta, TikTok, Amazon) win by owning the consumer relationship. Once they have that, suppliers, meaning anyone who needs access to those consumers, have no choice but to come to the platform on the platform’s terms. Over time, aggregators can commoditise and replace those suppliers, because any individual supplier is replaceable. The aggregator is not.

Brands are the suppliers in this framework. Every time you invest in growing an audience on someone else’s platform, you are deepening your dependency on an aggregator with no structural incentive to treat you as a partner.

Consider the information asymmetry in practice. TikTok knows which of your followers are 24-year-old women in Manchester who watch beauty content late at night and are in the market for a new moisturiser. They know when those people churn, who they follow instead, what competitor content they engage with. You know your follower count and your average view duration. That gap is not incidental. It is the source of the platform’s entire business model.

The Relationship Was Always Adversarial

The most persistent aspect of this dynamic is that it is disguised as cooperation. Platforms actively court brands. They hold conferences, publish case studies, offer managed service teams. They want your content because it attracts and retains users. They want your ad spend because it funds their business. They need you.

Needing you and sharing power with you are entirely different things. As Thompson noted in his follow-up analysis, suppliers to aggregators face a fundamental structural problem: even when aggregators genuinely depend on them, the aggregator’s control of the consumer interface means suppliers can be played off against each other. There is always another brand willing to create content. There is always another advertiser willing to buy reach.

The platform’s data moat is the product. The incentive for a platform to share meaningful audience data with you is structurally negative. If you understood your audience deeply enough to reach them directly, you would need the platform less. That is precisely why you don’t get that data.

The Measurement Problem Is Getting Worse

What makes this dynamic increasingly urgent is that the platforms’ data advantage is compounding faster than most brands’ ability to respond. As AI-mediated discovery grows through tools like ChatGPT, Perplexity, and Google’s AI Overviews, a new layer of aggregation is forming that is even more opaque than social media.

On Instagram or TikTok, a brand can maintain a presence, publish content, and build a following. In AI-mediated search, there is no profile page. There is no follower count. There is either relevance or invisibility, determined by systems you cannot see and cannot directly influence.

The brands that spent a decade optimising for search, building content libraries and SEO strategies, are watching organic traffic collapse as AI answers replace link clicks. One platform dependency was traded for another, and now that second dependency is being eroded by a third.

The Question Every Brand Needs to Answer Now

I am not arguing that brands should abandon social platforms or stop investing in reach. These channels have genuine value and, for many categories, represent the most efficient way to grow awareness at scale. The error is treating them as a destination rather than a funnel, and confusing rented audience with owned audience.

The question every brand needs to sit with is this: if the three platforms you rely on most changed their algorithm, raised their ad prices by 40%, or disappeared tomorrow, what would you have left? What direct relationships do you own? What data do you hold? Who can you reach without asking someone else’s permission?

Most brands, if they answer honestly, will find the answer unsettling. And that unsettling feeling is worth something. Because the brands figuring this out are not waiting for the next platform shock to motivate them. They are taking structural action now, acquiring the means of distribution itself.

That is what the next piece is about - brands that are buying the doorway to reduce their dependency on these platforms.

Have you done an honest audit of what audience you truly own, versus what you are renting? What did you find? Let me know in the comments.

Technically Entertaining covers business strategy at the intersection of gaming, technology, and entertainment. If this was forwarded to you, subscribe below to get every issue directly.

This is Part One of a three-part series on brand distribution, audience ownership, and the future of the attention economy. Subscribe today to receive the entire series straight to your inbox.

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March 24: Epic Games announced it was laying off 1,000 people alongside a transformation program that aims to realize an additional $500 million in cost savings. Epic is making these deep cuts amid lackluster engagement numbers in its flagship game Fortnite. Still, for a company that has been known for loose budgets and spending habits, this marks a remarkable shift in execution and fiscal responsibility - something Epic Games’ investor base will certainly appreciate. Which brings us to Disney.

Later the same day: OpenAI announced it would refocus all of its efforts on code and the performance of its core models. In other words: Anthropic is running away from us. No more playtime for. That led to the company shutting down its Sora application, for which Disney had signed a $1 billion deal. The team around Disney’s new CEO Josh D’Amaro waited seven days, until March 31, to cancel its deal with OpenAI and pull back.

In a span of seven days, the worlds of gaming and entertainment seemed to have been turned upside down. It felt like someone shook the snow globe so hard that the scenery resembled an Arctic storm more than a peaceful winter wonderland. Now that the “snow” is starting to settle and clarity is taking over, a new possible reality emerged that I have been advocating for a long time.

Disney is rumored to be contemplating an acquisition of Epic Games.

Finally.

An opportunity this compelling for both sides in a transaction rarely comes around.

I have spoken to people on the inside of both companies over the past week, as well as industry insiders close to them. These are more than rumors - Disney is seemingly actively evaluating a potential deal to buy Epic Games. Given the recent layoffs and challenging performance, any deal will certainly come in below Epic Games’ $32 billion peak valuation exactly four years ago, as well as its $22.5 billion valuation when Disney invested $1.5 billion in February 2024. Disney’s current market cap hovers around the $175 billion mark. Its stock price is on the same level where it was 11 years ago. Meanwhile Netflix’s stock price jumped from roughly $6 to $99 in the same period.

Disney needs a transformational event - buying Epic Games can be just that.

Here’s why I love this deal for Disney.

A Consistent Customer Journey That Connects Physical And Digital

Owning Epic Games gives Disney the ability to stretch its IP portfolio across the entire consumer journey and embed themselves along a key consumer passion point - gaming - to be always-on and always in direct engagement with consumers. Where the Parks business is the cash cow, it is a bigger barrier and cost to the consumer to access those. Worlds within Fortnite significantly reduce that barrier while increasing the monetization potential. CEO Josh D’Amaro has already revealed his intention to release new movies inside of Fortnite. The Simpsons collaboration and orchestrated rollout showed us what the future of transmedia looks like. Owning Epic Games and its flagship games gives Disney more than the ability to own video games - it would own one of the most culturally relevant real-estate and distribution channels on the planet.

Previously released articles related to this topic

Strengthening Disney’s Flywheel

Disney refers to its flywheel a lot, where digital engagement acts as a leading indicator and driver for its parks revenue. Former CEO Bob Iger described Disney+ as the portal to its parks. In 2025, Disney reported record operating income of $10 billion for its parks, which management attributed to stronger demand driven by its digital engagement and the success of digital-native franchises in physical spaces. Fortnite gives Disney a lean-in medium as opposed to streaming, which is a lean-back medium. The intensified engagement from Disney-themed Fortnite worlds will very likely translate to more streaming engagement as well as greater park revenue - considering that BCG reports an 86% conversion rate from purchases in gaming environments to physical purchases.

Intensifying Already High Consumer Passion

Disney’s NPS in early 2026 was reported at 38, significantly outperforming other media companies. Its parks perform even better at 49. Last year, 7 out of the 10 most-watched streaming shows in the US were Disney properties. Estimates have 60-80% of Gen Alpha engaging with Disney content daily. The consumer passion is strong. The ability to co-create inside gaming environments and leverage your favorite Disney characters inside Fortnite - or build part of a new park yourself - will only intensify the already strong connection consumers have to the brand. This is the playbook Disney wanted to roll out with OpenAI via its Sora app. Fortnite comes with the tools and the ecosystem for user-generated content to turn this on day one.

Building Its Digital Laboratory

Athleisure giant Adidas considers video games as their digital warehouse. A way to test new concepts at scale at very low cost and significantly shorten the supply chain and associated risks of production. For Disney, the stakes are even higher. The new Space Mountain in Tokyo Disneyland is set to cost roughly $460 million, making it one of the most expensive attractions Walt Disney Imagineering has ever created. Imagine you invest all this money to launch a new ride and have it flop. In Fortnite, Disney can create new rides and attractions at almost no marginal cost, track and understand consumer engagement in real-time, iterate on the concept - and green light it for production in the physical world when the risk of failure is practically zero.

The Risks Disney Can’t Ignore

No acquisition of this scale comes without friction. Disney’s track record with large deals is mixed. Pixar and Marvel were transformational successes. The Fox acquisition was far more complicated. Integrating a gaming company requires organizational muscle Disney has not yet built. The cultures are different, the talent expectations are different, and the speed of iteration required in gaming runs at a pace that large entertainment companies are structurally not designed for.

Epic Games’ valuation is still a negotiation. Even discounted from its peak, a deal of this size represents a meaningful portion of Disney’s $175 billion market cap. D’Amaro and his board will need to make a compelling case to shareholders that the strategic value justifies the premium.

And then there is Tim Sweeney. Epic’s founder and CEO has built one of the most influential companies in gaming with a clear vision and a willingness to fight his battles publicly - he took Apple to court over App Store fees and kept going for years. Sweeney’s continued involvement will be a defining factor in any transaction. Structuring a deal that retains his energy and creative ambition is as important as getting the price right.

What This Means for Brands

If this deal closes, it fundamentally reshapes how brands access gaming audiences. Right now, Fortnite brand deals go through Epic Games. A Disney-owned Fortnite changes the economics and the creative expectations. Brands that want access to Fortnite’s 80 million monthly active users will be negotiating with Disney’s brand partnerships team - a team that knows how to protect IP equity and will price access accordingly.

The bigger shift is strategic. Disney acquiring Epic does not just change who you negotiate with. It redefines what gaming means as a brand marketing channel. Disney’s IP management discipline combined with Fortnite’s cultural reach creates a new tier of branded entertainment. Think less “promotional activation inside a game” and more “co-authored cultural moment at global scale.”

The brands building genuine gaming competencies right now - that understand how to show up authentically in interactive environments and have a point of view on what their brand means inside a game world - will have a significant head start when this consolidation reshapes access and pricing. Passive observers will be paying premium rates for whatever inventory Disney decides to make available. Active participants will already have built the muscle.

The window to experiment cheaply and build fluency in gaming is still open. It will not stay that way much longer.

What do you think? Is a Disney acquisition of Epic Games the transformational deal both companies need, or does integrating a gaming giant into an entertainment empire create more risk than reward? Let me know in the comments.

Technically Entertaining covers business strategy at the intersection of gaming, technology, and entertainment - for the decision-makers shaping what comes next. Subscribe below to get every issue directly in your inbox.

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Niantic just revealed something that should fundamentally change how every executive thinks about the gaming industry.

The company behind Pokémon Go — the AR game that had 500 million people installing it in 60 days — sold its gaming division to Scopely last year. At the same time, it spun out a new AI company called Niantic Spatial. That company took the 30 billion images Pokémon Go players captured while hunting Pikachus across cities on every continent, and used them to build a world model that can pinpoint a location to within centimeters — without GPS. That model is now being used to help delivery robots navigate the real world.

This is not a pivot story. It is a harvest story.

Niantic built a game, deployed hundreds of millions of humans as data collectors, understood the built environment of cities at a scale no mapping company had achieved, and then sold the game when it had extracted what it needed. AppLovin did the same thing on a different axis. It built mobile games to study the relationship between ads, conversion funnels, and player behavior with a granularity no advertising platform could match from the outside. Once that intelligence was baked into its targeting algorithm, it sold the game studios to TripleDot.

To anyone who has spent real time in the gaming industry, this pattern is familiar. Games have always been the place where the hardest problems get solved first — because the stakes are low enough to iterate aggressively and the performance requirements are brutal enough to force real breakthroughs.

The question for decision makers is not whether this has happened before. It has, repeatedly, across hardware, software, behavioral science, and economics. The question is what gaming is building right now that the rest of the world will be running on in five years.

The GPU: Gaming’s Accidental Gift to AI

The most consequential technology transfer in modern history started with a graphics chip.

In 1999, NVIDIA released the GeForce 256, the first GPU specifically designed to handle the mathematical load of rendering 3D game worlds. The architecture was built for parallelism — thousands of small cores performing identical operations simultaneously rather than a few powerful cores doing tasks in sequence. The gaming industry needed this to render realistic environments at playable frame rates. What it created, without knowing it, was the foundational hardware for artificial intelligence.

The mathematics of 3D rendering — matrix multiplication, vector calculus — is identical to the mathematics of training neural networks. When researchers ran an image recognition model on two consumer NVIDIA gaming cards in 2012, they crushed every existing benchmark. The hardware that had been running Call of Duty turned out to be more capable of machine learning than the world’s most expensive supercomputers. NVIDIA’s release of CUDA in 2007 had already unlocked GPU programming for non-graphical tasks, but that 2012 result made the strategic reality impossible to ignore.

By 2018, NVIDIA introduced Tensor Cores — originally designed to upscale low-resolution game images using AI — which became the specific hardware architecture needed to train the Transformer models that power every modern large language model. The efficiency gains transformed economics: training runs that would have taken months shrank to days, making the current generative AI wave viable.

Today, GPUs are treated as a sovereign-grade strategic asset. Export restrictions. National stockpiles. Trillion-dollar market valuations. All of it traces back to the requirement that video games look good at sixty frames per second.

Game Engines: The Operating System for the Physical World

Unreal Engine and Unity started as tools for making games. They are now the infrastructure for industries that have nothing to do with games.

The reason is straightforward. Game engines solve extremely hard problems: real-time 3D rendering, physics simulation, lighting, networked state synchronization across thousands of concurrent users. Solving those problems at the performance level games demand creates tools that are simply better than anything a traditional enterprise would build for its own use case.

Film is the most visible example. The Mandalorian and The Batman replaced green screens with massive LED walls driven by Unreal Engine, rendering photorealistic parallax-correct backgrounds in real time. Post-production timelines that previously ran six to twelve months are now concurrent with filming. The virtual production market is growing at nearly 15% annually and is projected to exceed $11 billion by 2034.

Automotive is deeper. BMW and Tesla use game engines to design and prototype the digital dashboards their drivers see every day. More than half of virtual vehicle showrooms run on gaming engines. Aerodynamic simulations, ergonomic walkthroughs, HMI prototyping — all in game engines, all eliminating costly physical models before a single part is manufactured.

The most important application is robotics training. Synthetic data — artificially generated environments where every object, light source, and physical property is labeled and controllable — is now the primary solution to the data gap in physical AI. NVIDIA’s Isaac Sim, built on gaming libraries, allows developers to train robots in procedurally generated environments that simulate rare conditions impossible to capture in the physical world: extreme weather, mechanical edge cases, unusual human behaviors. The technique is called domain randomization. Game developers invented it to create visual variety. Roboticists use it to harden AI against the messiness of reality.

Virtual Economies: The Original Fintech Lab

Before anyone used the word fintech, games were running the world’s most sophisticated digital economies.

World of Warcraft and EVE Online pioneered digital scarcity, virtual currency management, and player-to-player marketplaces in the early 2000s. Game developers became, in effect, digital central bankers — managing inflation and deflation through carefully calibrated faucets (how currency enters the economy) and sinks (how it leaves). The Real Money Trade phenomenon proved that virtual labor could be reliably converted to fiat currency, establishing the foundational thesis that digital assets hold intrinsic value based on the effort required to acquire them.

This is not ancient history. The $1.5 billion creator economy on platforms like Roblox and Fortnite runs on these same mechanics. NFTs, tokenomics, burn mechanisms, decentralized exchanges — each has a direct predecessor in MMORPG design. The Roblox creator economy, Fortnite’s engagement payout pool, the IP Partner Licensing Program — these are all refinements of systems game designers built decades ago because they had no choice but to figure out how digital economies work.

What’s significant is the social dimension. On Discord alone, 41% of digital purchases are now gifted, and 25% of gift buyers are non-players engaging purely through social networks. The economy of game worlds no longer lives inside the game. It has migrated into the broader digital social fabric, taking the mechanics with it.

Behavioral Design: The Science of Human Engagement

The most underestimated technology transfer from gaming is not hardware or software. It is the science of what makes human beings do things.

Game designers spent decades solving the hardest problem in behavioral science: how do you get a person to voluntarily persist through difficulty, return day after day, and find meaning in structured challenge? The frameworks they developed — flow states, self-determination theory, variable reward schedules, social accountability systems — are now deployed across healthcare, education, finance, and enterprise software.

The results are quantifiable. Gamified health protocols have achieved medication compliance rates above 90%, significantly outperforming standard care. Surgeons trained in VR simulation built on game engines demonstrate training confidence improvements of 275% compared to traditional methods. Gamified learning platforms have demonstrated 60% improvements in information retention. Employee retention in organizations using gamified HR systems runs 69% higher.

Duolingo’s streak mechanic. Peloton’s leaderboard. Nike Run Club’s badge system. Apple Watch’s ring closure. These are all game design. The companies that built them understood something the rest of the business world is still catching up to: engagement is not a marketing problem. It is a design problem. And the people who know how to solve design problems at this level are game designers.

Human Understanding: The Psychological Dimension

All of the above — hardware, simulation, economies, behavioral mechanics — depends on one foundational input: understanding what human beings actually want, fear, value, and respond to.

This is where Solsten enters the picture.

Solsten built its proprietary psychological database by doing what no research firm had done before: interfacing directly with real players, in real gaming environments, at scale. Gaming creates uniquely honest conditions for psychological research. Players are not in a survey. They are not performing for a researcher. They are making thousands of micro-decisions under varying conditions of reward, frustration, competition, and collaboration. The behavioral signal is extraordinarily rich - and uncovering the psychology means uncovering the driver behind the behavior.

The result is a dataset that captures the psychological architecture of real human beings — their core motivations, values, and decision-making patterns — with a fidelity that traditional market research cannot approach. Not because the technology is different, but because the environment is. Gaming strips away the social performance layer that distorts every focus group and survey. People reveal who they are when they play.

That psychological database now powers decisions far beyond gaming. Understanding that a consumer is motivated by autonomy rather than status changes everything about how you design a product, price it, market it, and retain the person who bought it. Solsten’s data — built in gaming, applicable everywhere — is the human understanding layer that sits beneath every other technology on this list.

What Decision Makers Need to Understand

The Niantic story is not a curiosity. It is a template.

Gaming has always functioned as the world’s most efficient technology incubator, because the environment demands real solutions at scale. The cost of failure is a bad review. The reward for success is hundreds of millions of engaged users generating data no other industry can produce.

Every foundational technology on this list — GPUs, simulation engines, economic systems, behavioral design, psychological modeling — was built in gaming because gaming was the only environment demanding and tolerant enough to develop it.

The companies that understood this extracted enormous value. The ones that wrote gaming off as entertainment watched the infrastructure of the modern economy get built by people playing video games.

The next wave is being built right now. Spatial computing, physical AI, synthetic data at scale, real-time world models, humanization of AI. All of it is happening first in gaming.

The question is whether you’ll be paying attention this time.

Technically Entertaining covers the intersection of gaming, technology, and business strategy. If this post made you think differently about an industry you thought you understood, subscribe today and share it with someone who needs to hear it.

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I sat down with a senior partner at McKinsey at a tech conference in Munich recently, who works on AI agent implementations for Fortune 500 companies. After discussing half a dozen deployments across energy, healthcare, and financial services, he said something that stopped me cold:

“The number one complaint we hear from enterprise clients isn’t about accuracy or speed. It’s that the agents feel bland and robotic. They lack personality.”

This exact sentiment was mirrored in a room full of executives of a large European bank, where I ran a workshop on personalization, AI, and gaming.

But this shouldn’t surprise anyone who’s used Claude, ChatGPT, or pretty much any other AI assistant for more than a few minutes (except for Elaris, as this assistant actually uses real psychological data to power its models). The technology is impressive. The conversation is hollow. You’re talking to something that can process millions of tokens and reason through complex problems, but it has no idea who you are beyond what you’ve typed in the current chat.

The knee-jerk corporate response has been predictable and wrong: pre-define agent personalities. Build a suite of options.

Professional Agent.

Casual Agent.

Empathetic Agent.

Terse Agent.

Give users a choice and let them pick what works.

That’s not personalization. That’s a personality quiz from a 1990s magazine. And it fundamentally misunderstands the problem.

What’s funny to one person is offensive to another. What feels efficient to me feels cold to you. There are no objective definitions of “fun,” “nice,” or “pragmatic.” These are subjective evaluations that depend entirely on who’s receiving the message and what psychological state they’re in when they receive it.

This is why AI agents need to understand human psychology, not just mimic human personalities. And it’s why the current generation of LLMs, and even the next generation of world models, will fail to deliver true personalization without a fundamental infrastructure layer built on valid psychological data.

The LLM Limitation: Pattern Matching Without Understanding

Large language models like Claude and ChatGPT are statistical marvels. They’ve ingested billions of words and learned the patterns of human communication with stunning accuracy. They can write like Shakespeare, code like a senior engineer, and explain quantum physics like Carl Sagan.

But they don’t understand you. They understand language patterns. They know what words typically follow other words in specific contexts. They can detect sentiment in your message and adjust their tone accordingly. But that’s reactive pattern matching, not psychological understanding.

When you tell ChatGPT you’re having a bad day, it responds with empathetic language because that’s what the training data suggests is appropriate. It doesn’t know whether you’re the kind of person who wants emotional validation or practical solutions. It doesn’t understand if you’re conflict-avoidant or direct. It has no model of your cognitive preferences, your communication style, or your psychological drivers.

This creates a fundamental ceiling on personalization. LLMs can be trained to sound different. They can adopt various tones. They can even remember facts about you across conversations. But they can’t adapt to who you are psychologically because they don’t have a framework for understanding human psychology in the first place.

The result is interactions that feel generic even when they’re technically customized. The agent knows you prefer bullet points over paragraphs. It doesn’t know why you prefer them, what that preference reveals about how you process information, or how that should inform its approach to more complex interactions.

The World Model Promise: Understanding Reality, Missing Humanity

Yesterday, Meta’s former Chief AI scientist and widely considered as one of the godfathers of AI, Yann LeCun, announced his new startup AMI Labs. It has raised $1.03 billion at a $3.5 billion valuation to build world models - the largest seed round for a European startup ever. The premise is compelling: instead of training AI on language patterns, train it to understand the physical world the way humans do.

LeCun has been vocal about the limitations of LLMs, particularly their tendency to hallucinate. His proposed solution, Joint Embedding Predictive Architecture (JEPA), aims to build AI that learns from reality, not just from text. World models observe the world, build representations of how it works, and can reason about it more reliably than systems trained purely on language.

AMI Labs CEO Alexandre LeBrun, formerly CEO of digital health startup Nabla, understands the stakes. In healthcare, LLM hallucinations could have life-threatening repercussions. A world model that understands medical reality more fundamentally could be transformative.

But here’s what the world model approach still misses: understanding worlds without understanding the human beings inside those worlds, whose interactions with the world and with each other shape the meaning of the world itself.

A world model might understand that a hospital room contains certain equipment, that medications have specific effects, and that medical procedures follow particular sequences. But does it understand that the patient in that room is terrified of needles because of childhood trauma? That they’re a visual learner who needs diagrams, not verbal explanations? That they make decisions collaboratively with family members rather than independently?

The world isn’t just physical reality. It’s the psychological and social reality of the humans who inhabit it. And you can’t reason effectively about human needs, preferences, or optimal interactions without a psychological model of the humans you’re serving.

World models are a step forward for AI reasoning about physical systems. They’re not sufficient for AI that needs to reason about human systems. And most valuable AI agent use cases live squarely in the human domain.

Where This Actually Matters: The BCG Reality Check

Boston Consulting Group recently analyzed mentions of “Agentic AI” on earnings calls from Q3 to Q4 2025. The results show where enterprises are actually deploying these systems.

Energy companies are talking about agentic AI at a 728% increase. Consumer businesses at 322%. Healthcare at 46%. Financial institutions at 68%. Travel and infrastructure at 124%.

These aren’t use cases where understanding physical reality is the primary challenge. They’re use cases where understanding human behavior, preferences, and psychology is the entire point.

In energy, agents are being deployed for customer service, billing inquiries, and usage optimization. Success requires understanding how different customer segments respond to pricing changes, what communication styles drive behavior change, and how to tailor recommendations to individual psychology.

In consumer businesses, agents are handling everything from product recommendations to complaint resolution. The difference between an agent that drives revenue and one that annoys customers isn’t product knowledge. It’s psychological intelligence about how to match products to personality types, how to de-escalate frustrated customers based on their communication style, and how to create experiences that feel personalized rather than algorithmic.

In healthcare, where LeBrun sees AMI Labs’ first application through Nabla, the challenge isn’t just understanding medical reality. It’s understanding patient psychology. Do they want their doctor to be authoritative or collaborative? Do they process medical information better through statistics or stories? Are they motivated by fear of consequences or hope for outcomes?

In financial services, agents are handling investment advice, fraud detection, and customer onboarding. The technology can analyze market data perfectly. But can it understand whether a client is risk-averse or risk-seeking? Whether they trust data or intuition? Whether they want detailed explanations or executive summaries?

The agent deployments that are failing aren’t failing because they lack world models. They’re failing because they lack psychological models.

What True Personalization Actually Requires

Here’s what enterprise clients are actually asking for when they complain about bland, robotic agents: they want agents that understand people the way good salespeople, therapists, and teachers understand people.

A great salesperson doesn’t have a single personality they deploy with all customers. They read the customer’s psychology and adapt. Are they analytical or emotional? Do they want to be challenged or validated? Are they motivated by gains or losses? The salesperson doesn’t consciously run through a psychological framework, but they’re intuitively doing psychological modeling in real-time.

A great therapist doesn’t treat every patient the same way. They understand that some patients need direct confrontation while others need gentle exploration. Some want homework and structure; others want free-flowing conversation. The therapeutic approach is personalized based on psychological assessment, not just symptom presentation.

A great teacher doesn’t use the same teaching style for every student. They understand learning styles, motivation patterns, and cognitive preferences. They know which students need encouragement and which need challenge, which need structure and which need freedom.

This is what personalization means in human-to-human interactions. It’s not about having different pre-defined personalities. It’s about having a psychological model of the other person that informs dynamic adaptation.

For AI agents to achieve this, they need three things current systems lack:

First, a psychological framework. Not personality types or demographic segments, but a valid model of human psychology that captures cognitive preferences, communication styles, motivation patterns, and decision-making approaches. This framework needs to be based on actual psychological research, not engineering intuitions about how humans work.

Second, real-time psychological inference. The agent needs to observe interactions and continuously update its psychological model of the user. Not just “this person is frustrated” (sentiment analysis) but “this person is conflict-avoidant and processes information visually” (psychological modeling).

Third, dynamic behavioral adaptation. Once the agent understands the user’s psychology, it needs to adjust its behavior accordingly. Not just tone and word choice, but information density, decision-making support, challenge versus validation, and dozens of other interaction variables.

This is a fundamentally different architecture than current LLMs or proposed world models. It requires a human infrastructure layer built on valid psychological data.

Why Nobody Is Building This (Yet) Except For One Startup

The reason most AI companies aren’t building psychological infrastructure is the same reason most tech companies struggle with personalization generally: it’s hard, it’s slow, and it requires expertise outside traditional engineering domains.

Building a valid psychological framework requires partnerships with psychologists, cognitive scientists, and behavioral researchers. It requires longitudinal studies, validation against real-world outcomes, and constant refinement as you learn what actually predicts successful interactions. This is exactly what AI startup Solsten has been doing for the past 8 years - take the state-of-the-art medical grade psychometric assessments methods, measure hundreds of psychological data points of millions of real consumers, and constantly refine the methods while building out the largest psychological database. This can now serve as the foundation for a human infrastructure layer that both companies and AI agents desperately need.

Real-time psychological inference requires far more sophisticated observational AI than current sentiment analysis. You’re not just detecting emotional states, you’re inferring cognitive patterns from limited interaction data. This is a much harder machine learning problem than classification tasks.

Dynamic behavioral adaptation requires agents that can fluidly adjust dozens of interaction variables based on psychological models while maintaining coherence and achieving their core objectives. This is a control problem that makes most current AI agent architectures look primitive.

But the biggest barrier is that most AI companies are focused on what’s technically impressive rather than what’s actually useful. World models are intellectually fascinating. LLMs that can pass the bar exam make great demos. But agents that understand human psychology and adapt accordingly? That’s boring infrastructure work that doesn’t generate hype.

Until enterprise clients start walking away from deals because agents feel robotic. Until consumer applications see retention fall off because users feel like they’re talking to sophisticated chatbots. Until the gap between AI capability and AI adoption becomes undeniable.

Then the infrastructure work becomes urgent.

What This Means for the Next Wave

AMI Labs raised over $1 billion to build world models. That money will fund important research into how AI can better understand physical reality. But understanding physical reality without understanding psychological reality will leave a massive gap in agent usefulness.

The companies that figure out how to build valid psychological infrastructure will have a sustainable moat. Not because the technology is impossible to replicate, but because the expertise, partnerships, and validation required take years to build. You can’t copy-paste psychological frameworks the way you can fine-tune an LLM.

For enterprises deploying agents now, the lesson is clear: stop trying to solve the personality problem with pre-defined agent types. Start investing in understanding the psychological diversity of your users and building agents that can adapt accordingly.

For AI companies building the next generation of agents, the question isn’t just “how do we make agents smarter?” It’s “how do we make agents understand humans well enough to feel personal rather than algorithmic?”

The current generation of AI can mimic personality. The next generation might understand the world. But the generation that actually transforms human-computer interaction will be the one that understands human psychology well enough to adapt to it.

We’re not there yet. And we won’t get there by accident.

What’s your experience with AI agents? Do they feel personal or robotic? Let me know in the comments.

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“Our brands were out of position with where people wanted to play.”
- Chris Cocks, CEO Hasbro

Dear Readers,

When Chris Cocks said this after becoming Hasbro CEO in 2022, he wasn’t making excuses. He was diagnosing a terminal condition. Hasbro’s stock had crashed 70% from its pandemic peak. Traditional toy sales were in freefall. The $4 billion acquisition of Entertainment One, meant to vertically integrate film and TV production, had become a financial albatross. And the company that invented modern board gaming was watching its core business die in real time.

But Cocks had a secret weapon: Wizards of the Coast, the division Hasbro had quietly acquired in 1999 for what now looks like the deal of the century. The home of Magic: The Gathering and Dungeons & Dragons wasn’t just profitable. It was printing money at margins that would make software companies jealous. While physical toys struggled to break 5% operating margins, Wizards was running at 46%.

What happened next wasn’t a turnaround. It was a complete inversion of the business model. Hasbro didn’t save the toy company by making better toys. It killed the toy company and became a gaming company that happens to still make some toys on the side.

This is the story of how a 100-year-old manufacturer executed one of the most radical strategic pivots in consumer goods history. And why every other legacy brand should be paying very close attention.

The First Digital Disaster: When Hasbro Tried This Before and Failed

Hasbro’s current gaming dominance isn’t its first attempt at digital transformation. It’s actually the third. And the first two were spectacular failures that cost the company hundreds of millions of dollars and nearly two decades of wasted time.

In 1995, Hasbro launched Hasbro Interactive, a dedicated subsidiary to bring its board game portfolio to PC gaming. The strategy worked initially. Revenue grew 145% in 1997 by digitizing Monopoly, Scrabble, and Clue. Emboldened by early success, Hasbro went on an acquisition spree, buying Atari assets for $5 million, MicroProse for $70 million, and Avalon Hill for $6 million.

By 1998, Hasbro Interactive had become the third-largest video game publisher globally, with $196 million in revenue and $23 million in profit. It looked like the future. It was actually a house of cards.

The division had scaled too fast with too many concurrent projects and a bloating headcount. By 1999, despite revenue growth, it recorded a $74 million loss. When the dot-com bubble burst in 2000, Hasbro’s stock plummeted 70% and the company posted its first net loss in two decades. In January 2001, Hasbro sold the entire division to French publisher Infogrames for $100 million, ending its first gaming experiment in humiliating retreat.

The lesson learned was wrong. Instead of recognizing they’d executed poorly, Hasbro concluded that internal game development was too risky. For the next 20 years, they licensed everything to external partners like Electronic Arts and collected royalties. Safe. Low-risk. Low-reward. And completely irrelevant to where gaming was actually going.

The Silent Rise of Wizards: How D&D Saved Hasbro Without Anyone Noticing

While Hasbro was licensing Monopoly to EA and watching physical toy sales stagnate, something remarkable was happening inside Wizards of the Coast. The tabletop gaming division that Hasbro had acquired in 1999 was quietly building its own digital capabilities and proving that the company’s IP could thrive in interactive formats.

Magic: The Gathering Arena launched and immediately attracted millions of players who had never touched a physical card. Dungeons & Dragons, a 50-year-old tabletop role-playing game, was experiencing a cultural renaissance driven by streaming shows like Critical Role and digital tools that made the game accessible to new audiences.

By the mid-2010s, Wizards was contributing an estimated 20% of Hasbro’s total revenue but represented a much higher percentage of actual profit. The “omni-screen” strategy emerged, where leadership began to recognize that digital gaming wasn’t secondary to physical products. It was the primary engagement driver that actually made physical products relevant.

The COVID-19 pandemic made this undeniable. In Q2 2021, Wizards of the Coast and Digital Gaming revenue more than doubled as consumers flocked to Magic: The Gathering Arena and D&D digital toolsets during lockdowns. While physical retail was disrupted and film production shut down, digital gaming thrived.

But Hasbro’s leadership at the time, still committed to the “Brand Blueprint” strategy of vertical integration, spent $4 billion acquiring Entertainment One to control film and TV production. The logic was that owning the entire value chain from toys to movies would create sustainable competitive advantage. The reality was that high-capital film production with unpredictable returns was the exact opposite of what the business needed.

The Cocks Revolution: Killing the Old Hasbro to Save It

When Chris Cocks became CEO in early 2022, he came from inside Wizards of the Coast. He understood something the previous leadership didn’t: Hasbro wasn’t a toy company with a successful gaming division. It was a gaming company with a dying toy problem.

Cocks introduced “Blueprint 2.0,” a complete strategic reorientation around “fewer, bigger, better” brands and a shift of all investment toward digital and licensed gaming. The eOne acquisition was recognized as a mistake. The vertical integration dream was dead. Asset-light, high-margin digital gaming was the future.

The moves came fast and decisively. In April 2022, Hasbro acquired D&D Beyond from Fandom for $146.3 million. D&D Beyond had nearly 10 million registered users and was the essential digital companion for the tabletop game. By bringing it in-house, Hasbro secured direct customer relationships and eliminated royalty payments it had been making to Fandom. The acquisition was immediately accretive.

Then came the painful but necessary surgery. In August 2023, Hasbro sold the eOne film and TV business to Lionsgate for approximately $500 million, taking a massive loss on the original $4 billion investment. But the sale retired $400 million in floating-rate debt and freed Hasbro to transition to an asset-light entertainment model where it licenses IP to partners rather than funding production.

The financial impact was immediate. While traditional toy revenue continued declining, gaming exploded. And two external licensing deals proved just how valuable Hasbro’s gaming IP had become when paired with world-class developers.

The Proof: When Two Games Made More Than Entire Toy Lines

In August 2023, Larian Studios released Baldur’s Gate 3, a massive RPG based on Dungeons & Dragons. The game was a critical and commercial phenomenon, earning Hasbro approximately $90 million in royalties with zero development risk or capital investment.

Then came Monopoly Go!, developed by Scopely for mobile. The game became the fastest mobile title in history to reach $6 billion in lifetime revenue, generating $112 million in royalties for Hasbro in 2024 alone and approximately $168 million for the full year 2025.

Think about that. Two licensed games, neither developed by Hasbro, generated over $200 million in pure profit royalties. That’s more operating profit than most of Hasbro’s physical toy brands combined. And it required virtually zero capital, no inventory risk, no manufacturing costs, and no retail distribution headaches.

This was the model. License premium IP to best-in-class developers. Collect high-margin royalties. Use that cash to fund internal development of the most strategic franchises while maintaining the asset-light approach for everything else.

Going All In: The $1 Billion Bet on Internal AAA Development

Licensing proved the value of gaming IP. But Cocks wanted more. In 2025, Hasbro unveiled “Playing to Win,” a strategy built on five pillars: leading with IP, scaling digital, expanding into new markets, optimizing the portfolio, and driving operational excellence. At the center was a massive commitment: $1 billion invested in internal AAA game development.

Hasbro established four internal studios, each tasked with building high-fidelity titles:

Archetype Entertainment, led by BioWare veterans James Ohlen and Chad Robertson, is developing Exodus, a sci-fi RPG targeting a 2027 release. This is Hasbro’s bet on creating new IP that can compete with Mass Effect and The Witcher.

Invoke Studios, formerly Tuque Games in Montreal, is working on Warlock: Dungeons & Dragons, a third-person action-adventure game also slated for 2027. This represents Hasbro’s push to expand D&D beyond turn-based RPGs into action genres.

Skeleton Key, based in Austin and led by Christian Dailey, is reportedly developing an unannounced horror project, likely leveraging Hasbro’s library of genre IP.

Atomic Arcade was working on a G.I. Joe Snake Eyes game, but in a significant setback, Hasbro closed the studio in February 2026. The project’s status remains unclear, described only as being “evaluated.”

This internal studio strategy is high-risk. AAA game development is notoriously difficult, expensive, and unpredictable. Studios regularly go over budget and miss release windows. For every Baldur’s Gate 3, there are dozens of expensive failures. Hasbro is betting it can build the talent and infrastructure to compete with established gaming giants.

The company also hedged by announcing a partnership with Saber Interactive, the studio behind Warhammer 40,000: Space Marine 2, to co-develop a project based on a tentpole Hasbro IP, widely speculated to be Transformers. This represents a middle path between pure licensing and pure internal development.

The UGC Strategy: Meeting Players Where They Actually Are

While betting big on AAA, Hasbro simultaneously pursued a platform-agnostic UGC strategy, recognizing that younger audiences live inside Roblox, Fortnite, and Minecraft rather than traditional gaming or toy stores.

On Roblox, Hasbro launched Nerf Strike, which has recorded over 84 million visits. The strategy creates a bridge between physical and digital: Roblox-themed Nerf blasters include redeemable codes for virtual items, driving digital engagement while supporting physical sales.

In Fortnite, Transformers appeared through high-profile crossover packs featuring skins for Optimus Prime, Bumblebee, and Megatron. The use of Unreal Editor for Fortnite allowed community-driven maps, keeping legacy brands relevant within the world’s largest battle royale ecosystem.

Minecraft collaborations followed a narrative-driven model. The 2024 Transformers DLC offered a story-driven adventure from Earth to Cybertron with vehicle-to-robot transformation mechanics, released alongside physical Minecraft-themed Nerf blasters.

This wasn’t experimental marketing. It was strategic distribution, ensuring Hasbro’s brands remained culturally relevant in the ecosystems where Gen Alpha and Gen Z actually spend their time.

The Financial Inversion: When Gaming Becomes the Entire Company

The 2025 financial results tell the story of complete business model inversion. Hasbro reported total revenue of $4.701 billion, up 14% year-over-year. But the growth was entirely driven by one segment.

Wizards of the Coast and Digital Gaming saw 45% revenue growth to $2.187 billion. Operating profit grew 59% to $1.007 billion, representing nearly the entire adjusted operating profit for the company. The operating margin of 46.0% is among the highest in the gaming industry.

Magic: The Gathering finished its strongest year ever, up 59%, driven by the “Universes Beyond” strategy that integrated external IP like Lord of the Rings and Warhammer 40,000 into the game’s ecosystem.

Meanwhile, the Consumer Products segment declined 4% to $2.438 billion. Adjusted operating profit dropped 26% to just $113 million, with margins contracting to 4.6%. The traditional toy business that once defined Hasbro now barely breaks even.

The math is brutal and clear. Wizards generates $2.2 billion in revenue at 46% margins, producing over $1 billion in operating profit. Consumer Products generates $2.4 billion at 4.6% margins, producing $113 million. One division makes nearly ten times the profit of the other despite similar revenue.

Hasbro isn’t a toy company with a gaming division anymore. It’s a gaming company with a legacy toy business it hasn’t figured out how to shut down without destroying brand equity.

The Failures: When Ambition Meets Reality

The transformation hasn’t been without painful setbacks. In late 2025, Hasbro canceled “Project Sigil,” an ambitious 3D Virtual Tabletop for Dungeons & Dragons powered by Unreal Engine 5. The platform was intended to provide a high-fidelity, Baldur’s Gate 3-like experience for remote players. But internal restructuring and the realization that it was being treated as a video game rather than a utility tool led to a 90% reduction in the development team in March 2025. Servers shut down on October 31, 2026.

The closure of Atomic Arcade in February 2026 represents another setback. The loss of a dedicated studio working on G.I. Joe underscores the difficulty of managing internal AAA development in a volatile market where even established studios struggle.

These failures are expensive. But they’re also expected in AAA development. The question isn’t whether Hasbro will have more failures. It’s whether the hits will be big enough to justify the misses.

What Comes Next: The 2027 Moment of Truth

Hasbro projects mid-single-digit revenue growth and 50-100 basis points of annual operating margin improvement through 2027. For fiscal 2026, the company anticipates 3-5% revenue growth with adjusted operating margins reaching 24-25%.

A key focus is the “Seasonal Model” for Dungeons & Dragons, transitioning the tabletop game to a live-service-style release schedule beginning with the “Season of Horror” in June 2026. This move sustains community engagement and drives consistent sales of digital and physical accessories through D&D Beyond.

But 2027 is the defining year. The releases of Exodus and Warlock: Dungeons & Dragons will prove whether Hasbro’s $1 billion investment in internal studios was visionary or reckless. If these titles succeed critically and commercially, Hasbro completes its transformation from toy maker to top-tier interactive media company. If they fail, the company faces serious questions about whether it should abandon internal development entirely and return to pure licensing.

The Blueprint for Every Legacy Brand

Hasbro’s transformation reveals several principles that apply far beyond toys.

First, recognize when your core business is dead. Hasbro didn’t save itself by making better toys. It recognized that physical play patterns had fundamentally shifted and pivoted to where engagement actually happens.

Second, bet on your highest-margin assets. Wizards of the Coast was always more profitable than Consumer Products. The mistake was treating it as secondary for so long. When margins tell you where value lives, listen.

Third, asset-light beats vertical integration in volatile creative industries. The eOne acquisition looked strategic. Film and TV production looked like natural extensions. But high-capital, unpredictable creative production is the opposite of high-margin digital licensing. Hasbro learned this the expensive way.

Fourth, licensing can be as strategic as ownership. Baldur’s Gate 3 and Monopoly Go! generated over $200 million in royalties with zero development risk. The old model said you need to own and control everything. The new model says pair premium IP with world-class partners and collect pure profit.

Fifth, internal development is high-risk but necessary for strategic control. Licensing works until platform holders or publishers have too much power. Hasbro is building internal studios not because it’s safer but because it can’t afford to be entirely dependent on external partners for its most valuable franchises.

The Existential Question

Hasbro has successfully navigated the first phase of transformation. It divested the entertainment production albatross. It elevated gaming to the core strategy. It demonstrated that its IP has massive value in digital formats. And it’s investing in the capabilities to control its own destiny.

But the company faces an existential question it hasn’t fully answered: What is Hasbro if Consumer Products continues to decline?

The 2025 results suggest a future where Wizards generates $3+ billion at 45%+ margins while Consumer Products shrinks to $2 billion at sub-5% margins. At that point, why maintain the Consumer Products infrastructure at all? Why not spin it off, sell it, or simply wind it down and become a pure gaming and licensing company?

Hasbro’s leadership hasn’t articulated this endgame. They talk about “optimizing the portfolio” and “fewer, bigger, better brands.” But the financial logic points toward an eventual exit from most physical manufacturing. The brands can live through licensing. The community can engage through digital gaming. The profits flow from royalties and internal studios, not injection-molded plastic.

Chris Cocks inherited a company in crisis and turned it into a gaming powerhouse. The stock is up significantly from its 2022 lows. Margins are expanding. The gaming pipeline is robust. But the transformation isn’t complete. It’s just entering its most dangerous phase, where Hasbro has to prove it can execute AAA development at scale while managing the slow decline of the business that built the company.

2027 will tell us whether Hasbro becomes the model for how legacy brands survive digital disruption or a cautionary tale about the limits of transformation when you’re carrying a century of manufacturing baggage.

What’s your take on Hasbro’s strategy? Can a toy company really become a gaming giant? Let me know in the comments.

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When was the last time you yelled “Uno!” across the dinner table? For me that was just a few days ago when I played a couple of rounds of the card game with my daughter. If it’s up to toy maker Mattel, we’ll all be shouting “Uno!” a lot more soon - while playing on our mobile phones.

Mattel made a an important move two weeks when it announced that it had acquired the remaining 50% of its mobile gaming joint venture Mattel163 from NetEase. While the amount Mattel needed to spend ($159 million) pales in comparison to the overall revenue the company makes, it marks an important step in its transformation towards an immersive entertainment company.

“Our strategy isn’t Roblox. Our strategy is creator.” When Mattel VP Marcus Liassides said this, he wasn’t being clever. He was articulating something most legacy brands still haven’t figured out. Mattel’s gaming strategy isn’t about picking the hot platform of the moment and throwing money at it. It’s about understanding that gaming is no longer a channel. It’s infrastructure. And if you’re going to survive as a consumer brand in 2026, you better figure out how to make gaming integral to everything you do.

Mattel did. And the transformation from a struggling toy manufacturer to an IP-driven entertainment powerhouse is one of the most underappreciated strategic pivots in modern business. This isn’t a story about a company that “went digital.” It’s a story about a company that fundamentally reimagined what it sells, who it sells to, and how it captures value in a world where screens have replaced playrooms.

The Existential Crisis: Why Mattel Had to Change or Die

Let’s rewind to 2017. Mattel was a mess. The company was defined by its ability to design, manufacture, and distribute physical toys. That model worked great for seven decades. It stopped working when kids started spending more time on iPads than with action figures.

The numbers tell the story. Traditional retail was collapsing. Toys “R” Us filed for bankruptcy. Kids were choosing Fortnite over Fisher-Price. And Mattel’s leadership was churning through CEOs like they were disposable. The company was stuck in a death spiral: declining sales leading to cost cuts leading to less innovation leading to more declining sales.

More fundamentally, Mattel was operating under a fatal assumption: that it was a toy company that makes products. It wasn’t. It was a manager of franchises that happened to express those franchises as physical toys. That distinction might seem semantic. It’s not. It’s the difference between survival and obsolescence.

Enter Ynon Kreiz: The Media Executive Who Saw What Others Missed

When Ynon Kreiz became CEO in April 2018, he brought something Mattel desperately needed: a media perspective. Kreiz had run Maker Studios and Endemol Group. He understood that in the modern entertainment landscape, IP is currency. Distribution is table stakes. And the companies that win are the ones that can take a single franchise and stretch it across every possible medium where audiences live.

Kreiz looked at Mattel’s portfolio and saw what Wall Street couldn’t: Barbie, Hot Wheels, Fisher-Price, and Monster High weren’t declining toy lines. They were under-monetized entertainment franchises with decades of cultural equity and virtually no digital presence. The opportunity was staggering. The execution would be brutal.

The strategic pivot was clear. Mattel would stop being a manufacturing company and become an IP management company. Film, television, live events, music, and critically, digital gaming would become core pillars. Not nice-to-haves. Not experimental side projects. Core revenue drivers with dedicated investment and world-class execution.

Phase I: The Mobile Foundation (2018-2020)

Kreiz’s first move was the least sexy but most important: establish a beachhead in mobile gaming. In early 2018, Mattel formed a 50/50 joint venture with NetEase called Mattel163. The logic was simple. NetEase had world-class mobile development and publishing capabilities. Mattel had iconic card and board game IP that translated naturally to mobile. Together, they could build a portfolio that generated high-margin recurring revenue.

The results were immediate and dramatic. Uno! Mobile launched in 2018 and became a phenomenon. Not because it was innovative. Because it was Uno, executed flawlessly, available everywhere, with live-service mechanics that kept players coming back. Phase 10 and Skip-Bo followed, building out the casual card game vertical.

By 2020, Mattel163 had achieved 600% revenue growth. The joint venture attracted 20 million monthly active users and generated over 550 million downloads. More importantly, it proved that Mattel’s IP had digital elasticity. These weren’t just nostalgic adults playing digital versions of physical games. These were global audiences engaging with Mattel brands in new contexts.

The financial implications were profound. Mobile gaming offered significantly higher operating margins than physical toy manufacturing. It was less capital intensive. It wasn’t subject to seasonal fluctuations. And it provided first-party data that Mattel had never had access to in the traditional retail model. By 2022, Mattel163 was generating over $175 million in annual revenue and climbing.

Phase II: High-Fidelity Gaming and the Kidult Demographic (2021-2022)

Mobile established the floor. But to reach the “kidult” demographic, adult collectors and core gamers with nostalgic connections to Mattel brands, the company needed high-fidelity console and PC experiences. That meant partnering with real game developers who understood how to build premium titles.

In February 2021, Mattel announced a partnership with Milestone to create Hot Wheels Unleashed. This wasn’t a licensed cash-grab. This was a serious arcade racing game built in Unreal Engine with the production values to compete with established franchises. The game recreated the experience of racing die-cast cars on iconic orange plastic tracks, complete with a track builder and livery editor that let players customize everything.

The commercial success exceeded expectations. Hot Wheels Unleashed reached 1 million copies sold by December 2021, becoming the fastest-selling game in Milestone’s history. By April 2023, it had surpassed 2 million units sold and registered over 8 million players across all platforms, bolstered by inclusion in Xbox Game Pass and PlayStation Plus. The user community created over 1 million custom car designs and 350,000 original tracks.

This validated Kreiz’s strategy of working with world-class partners. Mattel didn’t need to build game studios from scratch. It needed to find the right developers for each franchise and ensure they had the resources and creative freedom to deliver quality. Hot Wheels Unleashed proved that toy-based games could be critically acclaimed and commercially successful when executed properly.

Phase III: The Barbie Phenomenon (2023-2024)

Then came 2023. The Barbie movie wasn’t just a box office success. It was the ultimate proof-of-concept for the “Barbie Playbook”, Mattel’s coordinated strategy to use major media events to drive engagement across every channel simultaneously.

The gaming component was critical. Mattel partnered with Gamefam to launch Barbie DreamHouse Tycoon on Roblox. The experience was designed to mirror the “Barbie Land” aesthetics of the film while using the popular tycoon mechanic where players build and manage their own environments.

The performance was staggering. Barbie DreamHouse Tycoon recorded over 3 million unique visits during beta. Following the official launch and strategic marketing tied to the movie release, the experience surpassed 29 million lifetime visits in weeks, eventually reaching close to 500 million visits. Players spent hours per session, with some reporting four-hour sessions to complete their DreamHouse builds.

This wasn’t just about reach. It was about understanding platform fit. Roblox’s user base skewed heavily toward Gen Z and Gen Alpha, exactly the audience Mattel needed to capture to secure its future. By creating an experience that felt native to Roblox while staying true to Barbie’s core play pattern of roleplaying and customization, Mattel demonstrated a sophisticated understanding of how IP translates across platforms.

The halo effect was immediate. Worldwide gross billings for the Dolls category surged by 29% in Q4 2023, driven by growth in Barbie, Disney Princess, and Monster High. More importantly, the digital-first engagement created a feedback loop. Data from the Roblox experience informed physical toy development, marketing strategies, and content creation. Mattel could now see in real-time which rooms, outfits, and activities resonated most with users.

But Mattel didn’t stop at Roblox. The company partnered with Xbox for a comprehensive Barbie campaign that included adding the pink 1956 Chevrolet Corvette and Ken’s 2022 GMC Hummer EV to Forza Horizon 5, creating custom Barbie DreamHouse-themed Xbox Series S consoles, and launching fashion-inspired controller faceplates. The integration was everywhere.

Phase IV: Full Control and the Shift to Self-Publishing (2025-2026)

By 2025, Mattel’s gaming strategy had matured to the point where the company sought greater operational control. The partnership model had worked. But partnerships mean sharing profits, sharing data, and compromising on strategic alignment.

On February 10, 2026, Mattel announced it would acquire NetEase’s 50% stake in Mattel163 for $159 million, valuing the total entity at $318 million. This was a watershed moment. By taking full ownership, Mattel would retain 100% of profits from titles like Uno! and Phase 10. More importantly, it brought several hundred specialized mobile game developers and digital marketing experts directly into the Mattel organization.

The acquisition was capital efficient. More than half of the purchase price was funded using Mattel’s existing share of the joint venture’s cash reserves. And the strategic rationale was clear: full control allowed Mattel to align digital game releases more closely with its broader product roadmap and theatrical slate, including the upcoming Masters of the Universe film.

In tandem with the acquisition, Mattel announced plans to become a first-party publisher, with its first two self-published mobile titles launching in 2026. This marked the completion of the transformation from licensing partner to active participant to full owner of its gaming destiny.

Mattel also deepened its commitment to user-generated content platforms. In October 2025, the company expanded its Roblox partnership to introduce a new slate of standalone titles, starting with a major Monster High experience. But the real innovation was the Roblox License Manager, which allowed independent developers to pitch and create officially licensed experiences using Mattel assets.

This was a radical shift in corporate IP philosophy. Historically, large corporations protect their trademarks zealously. Mattel chose to democratize its IP, turning millions of Roblox creators into an extension of its development team. By providing official assets through a centralized oversight system, Mattel scaled its digital footprint while maintaining brand integrity.

The Financial Transformation: From Manufacturing to High-Margin Media

The impact on Mattel’s financial profile has been profound. While net sales have remained relatively stable (around $5.4-5.5 billion from 2021-2024), the revenue mix has shifted dramatically toward high-margin digital income.

Mattel163 consistently exceeded targets, reaching over $200 million in revenue by 2024. Analysts estimated the fully-owned entity would contribute approximately $150 million in net sales in its first partial year of consolidation in 2026. More importantly, the gross margin story tells the tale. Mattel’s adjusted gross margin reached 50.9% in 2024, the strongest level in the company’s recent history. Digital gaming’s high-margin nature is a primary driver.

This matters because it changes the investment thesis. Mattel is no longer purely a manufacturing company subject to inventory risk and seasonal volatility. It’s a diversified entertainment company with recurring digital revenue streams that compound over time.

The Strategic Framework: What Mattel Got Right

Looking across the eight-year transformation, several strategic principles emerge that other legacy brands should study.

Platform Agnostic, Not Platform Dependent

When Marc Liassides said “our strategy is creator,” he was articulating a fundamental insight. Mattel doesn’t build for Roblox or Fortnite or mobile. It builds for wherever its audience is, using whatever platform best serves the core play pattern of each franchise. Barbie is about roleplaying and customization, so it thrives on Roblox. Hot Wheels is about speed and competition, so it thrives on console racing games. This platform flexibility prevents Mattel from being held hostage to any single distribution channel.

World-Class Partners Over In-House Hubris

Mattel recognized early that building game studios from scratch would be slow and expensive. Instead, it partnered with best-in-class developers: NetEase for mobile, Milestone for racing, Gamefam for UGC platforms. This allowed Mattel to move fast and learn from experts while maintaining creative control over how its IP was expressed.

Data-Driven Feedback Loops

The shift to digital gaming provided Mattel with unprecedented first-party data. Through games like Barbie DreamHouse Tycoon, the company can track precisely which elements resonate with users. This data now informs physical toy development, creating a virtuous cycle where digital engagement drives physical sales and vice versa.

The Barbie Playbook: Coordinated Transmedia Execution

The 2023 Barbie movie campaign demonstrated the power of synchronized execution across all channels. Film, gaming, physical products, and partnerships launched in coordinated waves that created cultural momentum. This wasn’t siloed marketing. It was orchestrated IP management where each channel amplified the others.

The Risks and What Could Still Go Wrong

Despite the progress, Mattel faces real challenges. In early 2026, the stock plummeted over 30% following a lackluster Q4 2025 report where revenue and earnings missed analyst estimates. This volatility underscores the high stakes of the transformation. Investors worry that weak performance in the traditional toy business can’t yet be fully offset by digital gains.

There’s also execution risk. Becoming a first-party publisher is hard. Mobile game publishing is brutally competitive. User acquisition costs are rising. The App Store top charts require $150 million just to break into the top 10 and $1 billion to stay there, according to Boston Consulting Group. Mattel plans to invest approximately $40 million in performance-based marketing for its digital games in 2026. That’s significant, but it may not be enough in a market where scale determines winners.

The UGC platform strategy also carries risk. By democratizing its IP through the Roblox License Manager, Mattel gains scale but loses some control. Quality varies. Brand safety becomes harder to manage. And if platforms like Roblox or Fortnite change their terms or lose relevance, Mattel’s investments could be stranded.

What This Means for Every Other Legacy Brand

Mattel’s transformation isn’t just a toy story. It’s the blueprint for how legacy consumer brands survive the shift to digital. The lessons are clear.

First, recognize that you’re not in the product business. You’re in the IP management business. Your brands have value beyond the physical goods you manufacture. The question is whether you’ll capture that value or let platforms and licensees take it.

Second, gaming isn’t a marketing channel. It’s infrastructure. If your customers, especially young ones, spend hours per day in gaming environments, you need a presence there that’s as sophisticated as your retail strategy. That means dedicated teams, real investment, and world-class execution.

Third, platform flexibility is survival. Don’t bet everything on one platform. Build a portfolio approach where you meet audiences wherever they are with experiences tailored to each environment’s unique characteristics.

Fourth, data is the moat. The real value of digital gaming isn’t just revenue. It’s the first-party data that creates feedback loops between digital and physical, allowing you to build better products and market more efficiently.

The Next Chapter

Mattel’s transformation from toy maker to entertainment company is far from complete. The company still generates the majority of its revenue from physical products. The digital segment, while growing, isn’t yet large enough to carry the business on its own. And the market remains skeptical, as evidenced by the stock volatility.

But the fundamentals are sound. Record gross margins. A massive digital player base across mobile, console, and UGC platforms. A robust pipeline of theatrical content (14 films in development) designed to create coordinated gaming moments. And most importantly, an organizational mindset that no longer sees plastic and pixels as separate categories but as different expressions of the same underlying franchises.

When Ynon Kreiz took over in 2018, Mattel was a manufacturing company in crisis. Eight years later, it’s an entertainment company with a gaming problem to solve: how to scale digital revenue fast enough to offset structural declines in traditional retail. The 2026 acquisition of Mattel163 and the shift to self-publishing suggest the company is serious about solving it.

Whether Mattel fully succeeds remains to be seen. But the strategy is right. The execution has been strong. And for every other legacy brand watching from the sidelines, wondering if they should “do gaming,” Mattel has provided the answer: you don’t have a choice. The only question is whether you’ll do it strategically or desperately.

Is your brand taking gaming seriously enough? Let me know in the comments.

We’ll be dissecting the transformational strategies of other brands and companies that use video games to future proof their businesses in upcoming posts. If there’s a company you think needs to be on our list, let us know below!

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I just got off the stage in Zurich at the Innovation Finanzplatz Schweiz Conference 2026 where I gave the keynote to Switzerland’s top 200 bankers on why gaming is essential for financial service providers in the context of modern day consumer touch points and engagement. I’m pretty sure I was the only non-banking person at the entire conference.

While it’s clear that this industry has some catching up to do, I was positively surprised by both the amount and the vigour of the head-nodding I received from the audience.

Financial institutions face two crucial challenges with respect to engaging their customers. First, the vast majority of their interactions with their customers are purely transactional (you check the balance on your account and you move on), which results in a vast distance between service provider and consumer. Second, younger audiences, the banks’ future customers, don’t go into the city to open a bank account in a physical branch. They don’t just live online, they live in video games predominantly.

Yet, the banking industry has a great example to look up to. Mastercard entered video gaming in 2012 already. When I interviewed Mastercard’s CMO Raja Rajamannar for my book Press Play, the strategic importance of gaming for the company became clear immediately: it’s an always-on initiative that sits right next to all other channels in terms of importance.

I’m confident we’ll see more financial service providers take the leap and adopt gaming in different ways. Fintech darling Revolut is already rumored to be looking into acquisitions in the gaming space to unlock customer acquisition for them.

There’ll undoubtedly be a steep learning curve ahead of them, which brings us to this week’s post.

The Numbers Don’t Lie: Brands Are Retreating

According to GEEIQ’s upcoming State of Brands in Virtual Worlds 2026 report, something remarkable happened in 2025. For the first time ever, the total number of brand integrations inside experiences on Roblox, Fortnite and other user-generated content platforms exceeded the number of active brand-owned worlds. Between January and December of last year, brands launched 335 integrations and just 252 owned worlds, marking a 57% year-over-year decrease in brand-owned worlds and a 14% increase in integrations.

This isn’t just new brands choosing a different path. It’s an active retreat. GEEIQ found that 31% of brands that launched an integration in 2025 had previously built a brand-owned experience. They tried ownership. They’re walking away from it.

GEEIQ CEO Charles Hambro frames this as a structural change:

“Brands that entered virtual worlds 2-4 years ago went in for hype, and it was still novel to have branded worlds, regardless of how much it cost to build and maintain one. Over time, the novelty wore off, it became harder to build an audience from the ground up without significant marketing budgets to amplify it, and ultimately, brands needed more tangible results they could measure to justify this investment.”

He’s right, but the story is more complicated than brands simply getting smarter. This shift reveals both hard truths about gaming and dangerous misconceptions that could leave brands worse off than before.

Why the Shift Is Happening: The Hard Truths

The Elephant in the Room: Making Games Is Brutally Hard

Let’s start with the obvious reality too many CMOs ignored when they greenlit their first Roblox world. Making games is hard. Not marketing-campaign-hard. Actually, genuinely, technically difficult in ways that most consumer brands have zero competency in.

Look at Disney. One of the best storytelling companies on the planet. Thirty years of attempts to crack gaming. Billions invested. Studios opened, shuttered, reopened. And to this day, the most successful Disney game based on Disney IP wasn’t made by Disney. It was made by a third-party developer called Second Dinner, for which Disney merely licensed its Marvel characters to create Marvel Snap.

If Disney struggles this much with gaming, what chance does a CPG brand or fashion label have building a game from scratch, maintaining it, and consistently seeing great results? The answer is borderline delusional confidence mixed with fundamental misunderstanding of what game development requires.

The Metrics Aren’t There, Part 1: Measurement Solutions Are Still Makeshift

Even if you somehow build a decent game or world, justifying the investment to your CFO becomes the next impossible task. According to brand executives I’ve spoken with privately, measurement and tracking solutions on platforms like Roblox and Fortnite have improved but still feel makeshift and cobbled together.

To justify the increased costs that operating live games requires, platforms need transparent and reliable measurement across the entire funnel. CMOs need to demonstrate ROI to finance departments. When the tools to do that are underwhelming, the business case for owned worlds collapses.

The Metrics Aren’t There, Part 2: The Numbers Were Just Bad

And assuming sufficient tracking was in place, maybe the metrics were just bad. Engagement tapered off quickly. Retention was low. After a quick brand awareness spike, there was no sustained impact.

A key reason: brands make it about themselves. You have to make it about the players and their experience. Always start with the audience and their needs. Make sure your brand values deliver against those user needs in a way that’s natural to the gaming environment you’re entering.

That’s the recipe for authentic experiences. If you don’t do that, the metrics won’t be there. And when the metrics aren’t there, the CFO pulls the plug.

Ramping Up: Harder to Scale From Scratch

Though it’s easier to attract players on platforms like Roblox or Fortnite compared to launching a new mobile game, building an audience from zero remains a massive challenge. The clear benefit to integrating with an existing game is that the audience is already there. Distribution and reaching critical mass become dramatically easier.

When Universal Pictures’ “How to Train Your Dragon” Roblox experience became the most-visited persistent branded world in 2025 by over 30 million visits, it proved something important. Entertainment IP with existing fandom can succeed with owned worlds. But for brands without that built-in audience? Integration starts looking a lot more attractive.

The Dangers of Overcorrecting: Why Integrations Aren’t Perfect

The conventional wisdom around this shift gets dangerous. Yes, integrations solve real problems. But treating them as the default strategy for all brands creates new pitfalls that CMOs need to understand.

Treating Games as Just Another Advertising Channel

The easiest trap: pick an existing world, slap your brand logo on it, report brand awareness lift, call it a day. It’s the easy way to tick the box on your gaming initiative.

But brands that treat games as simply another advertising channel miss out on all the downstream revenue potential games offer. Commerce integration. Loyalty programs. Data capture. Community building. Direct customer relationships. These opportunities exist when you control the experience. They disappear when you’re just buying a billboard inside someone else’s world.

Losing Creative Control: You Can’t Shape What You Don’t Own

When you build a new game or world, you can craft it exactly to what you want it to be. You control the narrative, the mechanics, the user journey, the data architecture, everything. When you integrate with an existing game, you have to live with the design confines of what exists and operate within that.

This matters more than most CMOs realize. Your brand might have specific storytelling needs. Your product might require specific mechanics to demonstrate properly. Your compliance team might have requirements about data collection. In an owned world, you accommodate all of this. In an integration, you’re at the mercy of the host experience.

The Authenticity Paradox: Choose Carefully or Fail Quietly

Picking the right game or world for your brand is incredibly hard. GEEIQ’s data shows brands are making the shift to integrations, but it doesn’t show whether those integrations are performing well. Based on conversations with developers and brand strategists, many aren’t.

Here’s the problem: brands aren’t doing the hard work of understanding their audience beyond “we want to engage young people.” That’s not strategy. That’s lazy. Picking the right game where your target audience is overwhelmingly present, where your brand values align naturally with the game’s themes, where your integration adds genuine value to players’ experience, that’s the work.

Hambro gets this right:

“With integrations being the new standard, brands should try to work closely with creators or at least ensure they’re included in the conversations early on. They’re not just a distribution channel, but they need to be a core part of the infrastructure. They are the experts on their own platforms, they know what their players like and what they don’t.”

That’s the key. But how many brands are actually doing this versus treating creators as just another vendor?

What Smart Brands Should Actually Do

The GEEIQ data doesn’t reveal that integrations are better than owned worlds. It reveals that most brands executed owned worlds poorly, and integrations offer a less risky way to stay in the game while learning.

The brands that will actually win in gaming over the next five years won’t be the ones blindly following the integration trend. They’ll be the ones that understand when to own and when to integrate based on their specific objectives, capabilities, and audience.

Own when you have entertainment IP with existing fandom, need full creative control, can commit to always-on operations, need proprietary data and direct customer relationships, or are willing to invest in serious user acquisition. Ultimately, I’m convinced more and more brands beyond entertainment IP owners will own their own games and worlds, but it may not be their immediate starting point.

Integrate when you’re entering gaming for the first time, your primary goal is brand awareness and reach, you have limited budget for ongoing operations, you’ve found a game where your target audience is already engaged, or you can genuinely add value to players’ existing experience. There’s a reason why integrating in existing games is the first strategy I recommend in my book: it’s easier to do, faster, cheaper, and most importantly: brands can learn, gain insight, and iterate from there.

The Best Strategy: Do Both Strategically

The most sophisticated brands like Adidas aren’t choosing one or the other. They integrate to learn, experiment, and reach new audiences quickly. They build owned experiences where it makes strategic sense and where they can commit real resources.

Mastercard’s approach is instructive. Raja Rajamannar describes gaming as an always-on initiative that sits next to all other channels. That’s not an integration strategy or an owned-world strategy. That’s gaming-as-infrastructure where different tactics serve different objectives within a cohesive whole.

The Real Learning Curve Ahead

For the financial services providers I spoke to in Zurich, and for any brand looking at gaming strategically, the GEEIQ data should be a warning, not a roadmap.

Don’t build owned worlds just because it’s novel or because your competitor did it. Don’t assume you can build a game without deep gaming expertise. Don’t launch without clear success metrics and infrastructure to measure them.

But also don’t assume integrations are the magic solution. Don’t treat games as just another advertising channel. Don’t skip the hard work of finding authentic fit between your brand and the gaming experience.

The brands that entered gaming 2-4 years ago went in for hype. Many are now retreating. The brands that enter now have the benefit of their expensive lessons. The question is whether they’ll actually learn from them.

The shift from owned worlds to integrations isn’t brands getting smarter. It’s brands getting more cautious. Smart would be understanding that gaming strategy requires the right approach for the right objective at the right time. Nostalgia isn’t strategy. But neither is chasing the latest trend without understanding why the previous one failed.

How is your brand approaching gaming strategy? Let me know in the comments.

Earnings season is in full swing and we have had Take-Two, EA, and Disney all report their latest financials already. Subscribe today to get the latest insights on what’s brewing at the top entertainment companies and how these shifts spill over into other industries.

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The World Economic Forum in Davos last week delivered one of the most remarkable gatherings of the world’s elite and most powerful in decades. The stakes were so high that even Elon Musk, who for years has openly defied and mocked the event in the Swiss Alps, made a last minute appearance to do a fireside chat with BlackRock CEO Larry Fink.

Amid all the geopolitical tensions and tantrums, Canada’s Prime Minister Mark Carney delivered a speech for the ages. What many didn’t notice was that the former banker delivered one of the soundest pieces of business advice.

Carney referred to the evolving relationships within the Western alliance and that reminiscing about, maybe even clinging to, the past partnership with the US isn’t going to be helpful going forward. It’s not a strategy. The tides have turned. Which means new strategies need to be crafted and deployed.

Carney might as well have been talking about two of the culturally most important industries, entertainment and gaming, when he uttered those five words. The deadly cocktail of reaching backwards, hoping to hold on to the comfort of the past and the known, mixed with a few ounces of Clayton Christensen’s Innovator’s Dilemma, where even some of the best companies fail to adapt to disruptive technologies only to be disrupted themselves, is on full display across the Hollywood and video gaming landscape.

Hollywood’s Streaming Denial: Blaming Netflix for Their Own Complacency

Hollywood is so concerned with condemning Netflix and blaming its own demise on the streaming giant that executives are forgetting to take a hard look in the mirror. Netflix only happened because Hollywood’s giants didn’t do it first. Classic Innovator’s Dilemma and complacency. Why change what’s working well (for us)?

They’re now paying the price. The writing has been on the wall for a long time. Hollywood execs will claim that Netflix killed the movie theater experience. Netflix didn’t do any of that. Consumer behavior changed.

Movie theater attendance in the U.S. over the past five years has experienced a volatile, slow recovery from pandemic-era shutdowns, remaining significantly below pre-2019 historical norms. While 2025 showed a strong, younger-skewing audience, overall admissions for 2025 are estimated at 780 million, a slight decrease of 4.9% from 2024 and still well below the over 1.2 billion tickets sold in 2019.

The trend is unmistakable. Theater attendance has been cut nearly in half since 2019, and it’s not recovering. Yet Hollywood executives continue to operate as if 2019 is coming back. It’s not. Consumers have fundamentally changed how they want to consume entertainment. They want flexibility. They want to watch on their schedule, on their devices, in their homes. The theatrical window isn’t sacred anymore. It’s a relic that still has its occasional moment.

The incumbents were simply too complacent to see what was going on and acknowledge a fundamental shift in their industry that would impact their precious business model. They chose nostalgia over reinvention.

Hollywood’s Next Nostalgia Moment: Artificial Intelligence

Now, Hollywood is facing its next nostalgia moment: AI. The use of AI will impact Hollywood production across the board. Sound, storytelling, visual effects, post-production. The list goes on.

The response from the industry? Lawsuits, strikes, and defensive posturing. The Writers Guild and Screen Actors Guild fought hard in 2023 negotiations to restrict AI use. Studios are being sued for training models on copyrighted content. Executives are publicly dismissing AI as a fad that will never replace human creativity.

But here’s the reality: AI is already embedded in Hollywood production pipelines. Visual effects houses are using AI for rotoscoping, color grading, and asset generation. Music supervisors are using AI to generate placeholder scores. Post-production teams are using AI to clean audio and speed up editing workflows. The question isn’t whether AI will be used. It’s who will control it and benefit from it.

Yes, there are real risks here and we need to make sure we protect IP, respect copyright and trademarks, and work with the talent that is there to allow them to level up and do a better job than before using AI, rather than aim for outright replacing people. Yes, there will be impact and it will likely be significant.

But looking to the past and desperately trying to preserve what once was, hoping the imminent change will subside, is naive at best and a terrible strategy that will doom your company at worst. The studios that figure out how to integrate AI responsibly, how to augment human creativity rather than replace it, and how to use AI to reduce costs without sacrificing quality will be the ones that survive. The ones clinging to 20th century production models will be the next Blockbuster Video.

Gaming’s Creative Purity Myth: When Art Meets Market Reality

Gaming purists like to shout it from the rooftops that games are an art form and if commercial interests become too dominant, it’s no longer a real video game and almost outright evil. I’ve been subject to a few messages claiming that I don’t understand gaming because I see the shift towards brands coming into this space in order to reach and engage new audiences and advocate for embracing this shift.

Let me be clear: games are absolutely an art form. But art doesn’t pay the bills. And if your studio can’t keep the lights on and you can’t feed your family, then what are you doing?

What has worked 20-30 years ago to make a game successful is no longer working and hasn’t for the past decade. Some of the most prominent and iconic game designers of the industry, like Raph Koster, start new game projects thinking about the business model first. Not because they don’t care about the art. Because they understand that sustainable art requires sustainable business.

The romantic notion that “if you build a great game, players will come” died in the 2010s. That worked 30 years ago when there were hundreds of games released per year. Now there are tens of thousands. The App Store alone sees over 1,000 new game releases every single day. Quality is table stakes. Discovery is the actual challenge.

The AI Paradox: Easier to Build, Harder to Win

The gaming industry is experiencing a profound paradox driven by AI. Production has never been easier. Standing out has never been harder.

AI has democratized game development and creative production, enabling any studio to generate code, mechanics, and assets at AAA speed. Small teams can now produce what would have taken large studios months to create. The result: more games reaching market faster, flooding acquisition channels with creative variations and shifting the bottleneck from production capability to marketing excellence.

The data in AppsFlyer’s latest report tells the story. In 2025, we saw a 10% paid install share increase year-over-year while ad impressions surged 20%, revealing AI’s dual impact on gaming channels. Total gaming user acquisition spend hit $25 billion in 2025, with roughly 50% flowing into the U.S. alone. However, U.S. budgets actually dropped 5% year-over-year as high costs and competition made incremental scale harder to justify. Meanwhile, spend increased 29% in Turkey and 19% in India.

The creative production arms race is intensifying. Top gaming spenders now produce 2,400 to 2,600 creative variations per quarter, up 25-30% year-over-year. Creative performance remains a numbers game where finding winners is increasingly difficult. Smaller advertisers (under $500K annual spend) scaled output 20-40% year-over-year just to compete. Lower mid-tier advertisers ($0.5M to $1M) showed flat or declining volume, while upper mid-tier ($1M to $4M) maintained scale like top spenders. Testing velocity now determines competitive advantage.

The market is also polarizing geographically. 66% of iOS in-app purchase revenue comes from Western countries, while emerging markets drive in-app advertising growth. Western countries dominate IAP with 55% on Android and 66% on iOS, with the U.S. alone commanding 45% of iOS spend. Emerging markets show rapid IAA expansion, with Turkey rising 25% across all genres. The split highlights market polarization between high-spending Western IAP hubs and ad-supported growth markets.

The Real Bottleneck: Marketing Is Now the Competitive Moat

The paradox is clear. AI makes it easier to build and create, but exponentially harder to stand out. The production problem is largely solved, but the attention problem has intensified. Gaming as an industry has quickly matured and marketing is now a true competitive advantage.

An internal analysis by Boston Consulting Group revealed that it takes roughly $150 million in user acquisition spend to break into the top 10 mobile games on the app stores and roughly $1 billion in forward-looking spend to stay there.

Read that again. $150 million just to get in. $1 billion to stay. This isn’t a creative problem. It’s a capital problem. And it’s why indie developers building “pure” games without monetization strategies or marketing budgets are increasingly irrelevant in the mobile market.

The gaming purists who rail against brands entering gaming spaces are fundamentally misunderstanding what’s happening. Brands aren’t corrupting gaming. They’re becoming essential partners for studios that need distribution and marketing firepower. When it costs $150 million to break into the top charts, partnering with a brand that brings its own audience, marketing budget, and IP recognition isn’t selling out. It’s survival.

What Strategy Actually Looks Like

So what does strategy look like in entertainment and gaming when nostalgia is off the table?

For Hollywood: Embrace AI as a production tool, not a threat. Invest in training talent to use AI to augment their work. Build workflows that use AI to reduce costs on routine tasks so budgets can focus on creative excellence. Stop pretending theatrical windows are sacred and build distribution models around how audiences actually consume content. Partner with platforms instead of fighting them.

For Gaming: Accept that marketing is now the moat and build accordingly. Think about business models from day one, not as an afterthought. Embrace brand partnerships as distribution channels. Use AI to scale creative production and testing velocity. Understand that being in the top 10 requires capital and infrastructure, not just great gameplay.

For Both: Stop looking backward. The markets have fundamentally changed. Consumer behavior has fundamentally changed. Technology has fundamentally changed. The companies that win won’t be the ones preserving the past. They’ll be the ones bold enough to build for the future that’s already here.

The Choice Is Clear

Mark Carney’s five words apply far beyond geopolitics. They apply to every industry facing disruption. Nostalgia isn’t strategy. It’s the opposite of strategy. It’s the comfortable delusion that if we just hold on long enough, things will go back to how they were.

Hollywood isn’t going back to 1.2 billion theatrical admissions.

Gaming isn’t going back to a world where great gameplay alone guarantees success.

AI isn’t going away.

Consumer behavior isn’t reverting.

The choice is simple. Adapt or die. Build for the future or cling to the past. The companies choosing nostalgia are writing their own obituaries. The ones choosing strategy are writing the next chapter of their industries.

Which side of history will you be on?

What’s your take? Is nostalgia holding back your industry? Are you witnessing complacency in your company? Let me know in the comments.

Gain valuable insight into strategies the most successful companies are deploying across the entertainment and gaming space, as well as understand their playbooks to navigate the changes driven by AI and evolving consumer behavior. Subscribe to Technically Entertaining today. Make sounder decisions for your business tomorrow.

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The events of the World Economic Forum in Davos are dominating the news headlines and social media feeds this week. If you haven’t been fortunate enough to be invited to the event in the Swiss Alps (or be able to purchase a ticket that goes for $150,000 to $500,000), there’s no way you have been able to escape the onslaught of content the event has generated.

Google search volumes for Davos peaked yesterday. Anything related to President Trump or Canada’s Prime Minister Mark Carney (who gave a speech for the ages, but that’s another post) is top of mind for people online.

Carney’s speech is racking up millions of views on YouTube. And then there’s French President Emmanuel Macron and his aviator sunglasses.

What a time to be alive. It’s been an absolute feast for social media content. One thing that all of the videos and images have in common as we are consuming them is this:

We’re holding our phones vertically.

Which brings us back to technology and entertainment, the real reason why you’re reading Technically Entertaining, and an update streaming behemoth Netflix announced during its earnings call this week that may seem benign, but it is actually a pretty big deal.

Netflix Is Going Vertical

First, Netflix delivered strong financial results. Fourth quarter revenue of $12.05 billion exceeded Wall Street estimates of $11.96 billion, representing approximately 18% growth compared to Q4 of last year. Full year revenue came in at $45.2 billion, representing 16% growth. Netflix projects 2026 revenues between $50.7 billion to $51.7 billion (growth of 12-14%) with 325 million subscribers worldwide.

But aside from these impressive numbers, another announcement regarding the user experience of its mobile app deserves attention, because it signals the strategic direction Netflix is pursuing and what it views its real competition to be.

The Vertical Revolution: Why This Matters

Netflix is fundamentally redesigning its mobile app experience around vertical video. Not as an experiment. As the primary interface for mobile users going forward. This is a seismic shift that acknowledges a truth the industry has been dancing around: horizontal, lean-back viewing is losing the battle for attention to vertical, scroll-through consumption.

The data makes this undeniable. Short-form vertical video now accounts for over 82% of global internet traffic. TikTok users spend an average of 95 minutes per day on the platform, almost entirely in vertical format. Over 90% of Gen Z and Millennials consume video content on mobile devices, and when they do, they hold their phones vertically 94% of the time.

Netflix co-CEO Greg Peters acknowledged this reality during the earnings call:

Read that carefully. “More clips based on new content types” isn’t about making Stranger Things easier to discover. It’s about transforming Netflix from a destination for 45-minute episodes into a feed of consumable moments that keep you scrolling.

This Is Netflix’s Admission: YouTube Won

Let’s be clear about what this vertical pivot really means. It’s Netflix’s clearest admission yet that YouTube, not Disney+ or HBO Max, is its most dangerous competitor. And YouTube is absolutely dominating.

YouTube now commands over 1 billion hours of watch time per day on TV screens alone. On mobile, YouTube Shorts generates 70 billion daily views. The platform has over 2.5 billion monthly active users. For context, Netflix’s 325 million subscribers watched approximately 500 million hours per day in 2024. YouTube is moving more than double Netflix’s total viewing volume.

But YouTube doesn’t just have scale. It has variety. Long-form documentaries, 10-minute explainers, 60-second Shorts, live streams, video podcasts. YouTube has trained users to expect everything in one place. And YouTube is leaning on content creators, which results in dramatically cheaper means of production of this content variety.

Ted Sarandos, Netflix’s co-CEO, basically said this out loud:

Notice what he listed: gaming, social media, big tech, video platforms. Netflix isn’t competing with other streaming services anymore. It’s competing with the entire attention economy.

The Three Pillars Netflix Is Building Toward

The vertical video shift enables three strategic content pillars Netflix needs to stay relevant.

Short-Form Video

Netflix has been experimenting with “Fast Laughs,” a TikTok-style vertical feed of comedy clips. That’s expanding. The vertical video feed will include clips from across Netflix’s library, algorithmically surfaced based on viewing history and trends.

Why does this matter? Discoverability is Netflix’s Achilles heel. Despite billions spent on content, most subscribers watch a tiny fraction of the catalog. Vertical video clips solve this by turning passive browsing into active engagement. You scroll, watch a 30-second clip, get hooked, click through to the full episode.

More importantly, short-form video keeps users in the app when they don’t have 45 minutes for a full episode. It captures the 5-minute window waiting for coffee, the 10-minute commute, the mindless scroll before bed. That’s time Netflix currently loses to TikTok, Instagram, and YouTube Shorts.

Video Podcasts

Netflix launched video podcasts in January 2026, starting with high-profile shows from Spotify. This wasn’t a courtesy to audio creators. It was a strategic land grab. Podcasts represent over 500 million listeners globally, and video podcasts specifically have exploded. Joe Rogan’s show generates over 200 million downloads per month, with the video version on YouTube driving the majority of engagement.

The vertical video feed gives Netflix a native way to surface podcast clips. A 2-minute highlight from a 90-minute conversation, optimized for vertical viewing, drives users to the full episode. This is the same playbook YouTube has used to dominate podcast distribution.

But here’s the bigger play: video podcasts are cheap to produce relative to scripted content, they generate consistent engagement, and they create parasocial relationships that keep subscribers loyal. If Netflix becomes a legitimate podcast destination, it diversifies beyond expensive scripted series and gives users a reason to open the app daily, not just when a new season drops.

Gaming

Netflix has been investing heavily in gaming since 2021, with over 100 titles now available. Engagement has been decent but there’s a lot of room for improvement, largely because gaming within a video streaming app feels incongruous. But vertical video changes the equation.

Imagine scrolling through a vertical feed and seeing a 15-second gameplay clip from a Netflix game. You tap, you’re instantly in a playable demo. No separate download, no friction. Just scroll, tap, play. This is how mobile gaming actually works in 2026.

Netflix’s gaming strategy has struggled because it tried to position games as standalone experiences. The introduction of games can be played directly from the app on your TV is a step in the right direction. Vertical video lets Netflix further position games as content, just another thing you might scroll past and engage with. If Netflix can crack mobile gaming distribution through vertical feeds, it opens up a multi-billion dollar revenue stream that doesn’t rely on subscription growth.

The Real Strategic Bet: Becoming a Super App

What Netflix is really building toward is a super app for attention. Not in the WeChat sense, but where one app serves multiple content consumption needs throughout the day.

Right now, Netflix is a destination. You open it when you want to watch a show. The rest of the day, you’re on YouTube, TikTok, Instagram, Spotify, and mobile games. Netflix’s vertical video strategy is about collapsing those use cases into one feed. Short clips for the scroll. Full episodes for the lean-back. Podcasts for the commute. Games for the waiting room - it’s the entertainment center for our lives.

This is the only way Netflix justifies its valuation in a world where subscriber growth is slowing. You can’t grow subscribers forever. But you can grow time spent per subscriber. And time spent is what really matters. More time means more pricing power, more advertising inventory (for the ad-supported tier), and more opportunities to keep users from churning.

The vertical video feed is the interface that makes this possible. It’s the discovery engine that surfaces content you didn’t know you wanted. It’s the funnel that moves you between content types seamlessly.

What Comes Next

Netflix’s vertical video pivot won’t happen overnight. The interface will roll out gradually, the content mix will evolve, and user behavior will take time to shift. But make no mistake: this is the future Netflix is betting on. A future where the line between streaming service, social media platform, and content feed disappears entirely.

The question is whether Netflix can execute this transition while maintaining its core product. The risk is alienating subscribers who came for prestige TV and now find themselves scrolling through clips. The opportunity is capturing billions of micro-moments that currently go to competitors.

One thing is certain: Netflix’s leadership understands what many legacy media companies still don’t. The battle for attention isn’t about having the best shows anymore. It’s about being where attention already lives. And in 2026, attention lives in games and on social media. On mobile devices, that means vertical feeds.

How do you feel about Netflix’s vertical video shift? Is this the future of streaming or a desperate pivot? Let me know in the comments.

Companies across all industries are waking up to the fact that consumer engagement has dramatically shifted and that the old playbooks no longer work. From media companies, banks, hospitality providers, consumer goods, to governments. Gaming and gamified experiences are the number one gateway to modern day consumers. Technically Entertaining is dedicated to decoding this shift for you and your organization. Join like-minded leaders and subscribe today.

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Disneyland. The Simpsons. K-Pop Demon Hunters. SpongeBob. South Park.

What do all of these have in common? They all integrated in the video game Fortnite in just the last four months.

Fortnite is the premier cultural platform of our time. I was recently asked on a podcast which video games and gaming platforms brands absolutely have to be present in, in 2026, if they want to engage players and consumers.

Everyone’s knee jerk reaction right now is to say Roblox. Yes, Roblox had a great year 2025. But the game or environment a brand chooses to engage in has to be chosen carefully against the following two questions:

1. Who is the audience I’m trying to engage / what are their values?

2. Who am I as a brand and what do I stand for?

The platform and game that lets a brand make those two ends meet is the best platform, because it leads to authentic experiences.

So yes, Roblox is having a moment, but the truth is Roblox isn’t a fit for every brand, nor is it smart to focus your gaming efforts on one single platform. Take a look at Mattel. Its SVP Marcus Liassides recently said: The strategy isn’t Roblox. It’s creator.

Or take a look at the NYT: they’re making their own mobile games.

The second part to the question I was asked on the podcast was this: what game and platform do I think will have a breakout year this year?

Here, my answer is a lot pointed and singular: Fortnite.

Yes, Fortnite has been around for a while and it’s certainly not a dark horse nor should it come as a complete surprise that my pick is Fortnite. But why Fortnite will have a massive year this year, now, is really the important aspect to unpack.

Epic Games creator Fortnite has taken deliberate actions to complete a highly technical transition from a singular game to a comprehensive, multi-modal digital platform. From integrating professional tools for content creators, opening itself up to rival game engines, to building direct-to-consumer commerce systems, Epic Games alleviated some of the biggest complaints UGC creators in Fortnite had while making outright savvy business moves. Let’s take a look at each of them.

The Revised Creator Economy: Paying for Real Engagement

The primary driver for Fortnite’s anticipated dominance in 2026 is the radical restructuring of its creator economy. Epic Games has moved beyond a simple affiliate model to a sophisticated engagement-based system that compensates creators based on the value they bring to the ecosystem. This transition is powered by the Unreal Editor for Fortnite (UEFN), a toolset that allows developers to utilize Unreal Engine’s professional capabilities, including advanced rendering, lighting, and VFX, directly within the Fortnite environment.

The 40% Engagement Pool

The engagement payout system distributes 40% of eligible net revenue from Fortnite’s Item Shop and real-money purchases to qualifying island publishers. This “Engagement Pool” is calculated by taking gross revenue and adjusting for platform fees (12% on Epic Games Store, 30% on consoles) and taxes. Epic retains the remaining 60% for ecosystem development, infrastructure, and marketing.

The payout formula, significantly revised on November 1, 2025, now prioritizes high-value engagement metrics. Active playtime tracks total minutes players spend on an island, but only counts engagement from paying players who have made at least one real-money purchase. This prevents exploitation through bots or idle accounts. Island retention rewards creators when players return specifically to their island on subsequent days, not just to Fortnite generally. Playtime surrounding V-Bucks spend provides bonuses to creators whose content is engaged with by players in the week before or after they spend currency, creating a direct link between creator content and ecosystem revenue.

User Acquisition as Growth Catalyst

The most aggressive change for 2026 is the introduction of user acquisition rewards. Epic now rewards developers who bring new or lapsed players (those who haven’t played in six months) into the game. If a creator attracts such a player to their island, they receive 75% of that player’s contributions to the engagement pool for six months. These contributions are derived from the player’s total V-Bucks spending across the entire game, effectively granting creators a significant share of that user’s lifetime value.

This revised structure has already seen massive success. Since UEFN’s launch, players have spent over 11.2 billion hours across 260,000 creator-made islands, resulting in $722 million paid out to creators by late 2025. Several individual creators have already earned more than $10 million each, proving the Fortnite creator ecosystem can support professional studios and independent developers alike.

Direct Creator Commerce: Building Sustainable Business Models

The introduction of Direct Creator Commerce in late 2025 marks a paradigm shift in how developers monetize content. Previously, creators relied solely on indirect engagement payouts. Now they can sell digital items directly within their islands using V-Bucks, building sustainable business models less dependent on general ecosystem traffic.

The Promotional 100% Revenue Share

To incentivize rapid adoption, Epic announced a promotional revenue share of 100% of V-Bucks value for all sales made within creator islands through January 31, 2027. After this period, the rate drops to 50%. After accounting for platform fees averaging 26% across devices, the 100% promotional share translates to creators receiving approximately 74% of retail spending. This crushes competitor platforms like Roblox, which typically offers only 25% to developers.

Creators implement these transactions using UEFN and the Verse programming language. Items are defined as “entitlements” with immutable attributes. Prices must be set between 50 and 5,000 V-Bucks in increments of 50.

The regulatory framework is rigorous. Creators cannot sell global Fortnite cosmetics like Outfits or Emotes, as these remain exclusive to the core shop. However, developers can sell gameplay-consequential items like “Boots of Speed” that grant advantages within specific islands. For paid random items (loot boxes), developers must explicitly state percentage chances and use Epic’s APIs to ensure compliance with regional laws and parental controls.

The Strategic Alliance with Unity: Breaking Down Walls

One of the most unexpected developments for Fortnite in 2026 is the landmark partnership with Unity, announced in November 2025. These traditional rivals in the game engine space have aligned to allow developers to publish Unity-built games directly into the Fortnite ecosystem. This move is a strategic attempt to build an open metaverse that prioritizes developer choice over platform-exclusive silos.

Interoperability and Commerce Integration

The partnership goes beyond publishing. Unity is bringing Unreal Engine support to its cross-platform commerce tools, allowing Unreal developers to manage digital catalogs, payment providers, and web shops across PC, mobile, and web. For Unity developers, the benefit is access to Fortnite’s 650 million registered users. By publishing to Fortnite, they participate in the Creator Economy, receiving engagement payouts and conducting in-island sales within their Unity-developed experiences.

This technical bridge allows standalone experiences to exist within the massive Fortnite metaverse, effectively turning Fortnite into a “gamefront,” an interactive interface that can launch other programs. Through this collaboration, Epic Games Founder Tim Sweeney and Unity CEO Matt Bromberg are positioning their companies to lead a future where companies build an open metaverse that is interoperable and fair. This interoperability is expected to drive significant growth in 2026 as high-quality indie and professional titles built in Unity flood the Fortnite Discover tab.

Self-Serve IP Licensing: Democratizing Brand Collaboration

In 2026, the barrier to entry for creators wishing to work with major brands has been virtually eliminated through the IP Partner Licensing Program. This system allows creators to use curated assets from global IPs like LEGO, Teenage Mutant Ninja Turtles, and Netflix’s Squid Game directly within UEFN projects without negotiating individual licensing deals.

The 15% IP Partner Fee Model

The program operates on a fee schedule. When a creator uses a partner template or asset, 15% of their potential engagement payout is automatically diverted to the IP holder as a licensing fee. Creators access these assets through a dedicated “Brand Selection” dropdown in the UEFN Project Browser, allowing them to start building with bespoke templates. To publish, creators simply enroll in the Island Creator Program and sign the IP Partner Licensing Agreement, a streamlined one-click process.

This self-serve model represents a fundamental shift in IP strategy. By allowing the community to build official branded islands, IP holders generate revenue and engagement at scale previously impossible through traditional owned-and-operated world-building. Data from GEEIQ indicates brand integrations on Fortnite grew at an average of 32% quarter-on-quarter since early 2024, far outpacing the 14% growth of owned brand islands. The future of brand activation in Fortnite is decentralization, where brands provide the building blocks for the community to create experiences.

Case Study: The Simpsons Mini-Season

The collaboration with The Simpsons in November 2025 served as a blueprint for high-impact IP rollouts. To quote an Epic Games executive when I asked him about the performance of this collaboration: “It’s done incredibly well for us.”

Rather than a simple cosmetic drop, the event was a month-long mini-season that completely transformed the Fortnite environment, bridging the gap between Chapter 6 and Chapter 7 while maintaining high player engagement during a period that usually sees a seasonal dip.

Map Overhaul and Transmedia Storytelling

The rollout transformed the top-left corner of the Fortnite island into a cel-shaded recreation of Springfield. Iconic locations like Moe’s Tavern, Krusty Burger, and Springfield Nuclear Power Plant were introduced as named locations. The existing Berg gas stations were replaced by Kwik-E-Marts. The aesthetic matched the show’s animation style perfectly.

The event featured a narrative arc where Homer Simpson attempted to use a Zero Point shard to solve his problems, inadvertently causing food rain (supersized donuts and pizzas falling from the sky) and creating a kaiju version of himself. To deepen immersion, Epic released weekly animated shorts both in-game and on Disney+, including “Apocalypse D’Oh” and “The Incredible Bulk,” providing narrative hooks that kept players returning.

The battle pass included Homer, Marge, Flanders, and remixed versions of Fortnite mascots like “Blinky Fishstick” and “Springfielder Peely.” The combination of nostalgia-driven content, new gameplay mechanics, and transmedia storytelling made this one of the most successful collaborations in the game’s history.

Case Study: South Park Born in Chaos Event

Following The Simpsons, the South Park “Born in Chaos” event (January 9 to February 5, 2026) demonstrated further evolution in how IP integrates into core Battle Royale. This event focused less on map overhaul and more on experimental game modes and high-impact mythic items - and it couldn’t be more timely given the shows absolute cultural dominance given current political events.

Quints Mode and Game-Changing Items

The most significant structural change was the introduction of “Quints,” a five-player squad mode added to standard Battle Royale and Zero Build playlists. This was the first time in Fortnite’s history that five-player teams were supported, fundamentally reshaping match pacing and team strategy.

The event introduced items that directly manipulated core game mechanics. The “Stick of Truth” allowed players to control the Storm’s behavior and location, providing immense tactical advantage. “Kenny’s Respawn Token” granted players an automatic reboot upon death, nodding to the show’s recurring theme of Kenny’s frequent deaths and resurrections.

The event was supported by a free, quest-driven pass. Unlike the standard Battle Pass, rewards like the “Backpack of CRED” could only be earned by completing specific South Park-themed quests, such as riding rides at Cartmanland or eliminating a player after getting knocked. This design ensured the event felt like a focused, interactive experience rather than just a cosmetic sale.

The Disney Partnership: Building a Persistent Universe

The collaboration between Epic Games and Disney, fueled by Disney’s $1.5 billion investment in February 2024, is the most ambitious project in the Fortnite 2026 roadmap. The objective is to build a persistent entertainment universe that interoperates with Fortnite and brings characters from Disney, Pixar, Marvel, Star Wars, and Avatar into a shared space.

Disneyland Game Rush

In November 2025, the first concrete product launched: “Disneyland Game Rush,” a collection of theme park-inspired minigames like a Haunted Mansion treasure hunt and Spider-Man shooting gallery, connected through a hub recreating the feel of walking through Disneyland. What distinguishes this from previous collaborations is its structure as a mostly self-contained space where Disney maintains complete control over its branded corner of the metaverse.

Crucially, this universe is built using Unreal Engine, allowing for high graphical fidelity and seamless transitions between different content areas. While it interoperates with Fortnite, not all Fortnite skins work in the Disney universe to ensure brand safety. This project is Disney’s answer to the metaverse, allowing them to reach hundreds of millions of active Fortnite players without building a separate platform from scratch.

Digital-Physical Integration

A key feature expected in 2026 is convergence of the digital experience with real-world Disney Parks. Reports suggest players may complete challenges in Fortnite that unlock exclusive rewards or experiences during physical park visits, and vice versa. This hybrid model positions the Fortnite x Disney universe as more than just a game. It’s a cross-media ecosystem that merges gaming, media consumption, and real-world hospitality.

Expanding the Sub-Ecosystems: LEGO and Festival

While Battle Royale remains the flagship mode, the success of 2026 is also driven by expansion of sub-ecosystems like LEGO Fortnite and Fortnite Festival. These modes cater to different player niches and ensure Fortnite functions as a comprehensive entertainment platform.

LEGO Fortnite Odyssey

LEGO Fortnite has evolved into “LEGO Fortnite Odyssey,” with the 2026 roadmap focusing on deep progression and survival mechanics. The “Storm Chasers” update introduced the Storm King, a recurring villain whose invasion creates random Storm Dungeons across the map. These dungeons provide high-level puzzles and combat challenges that refresh every 24 hours with new pathways and dangers.

Physical world integration is significant, with five new LEGO Fortnite sets scheduled for 2026, including a 1,963-piece “Rave Cave” and buildable “Kit’s Mech.” These sets strengthen the brand’s presence in physical retail while driving players back to the digital mode.

Fortnite Festival: The Music Distribution Channel

Fortnite Festival, the Rock Band-style mode developed by Harmonix, has committed to long-term support through 2026 and beyond. The mode has already featured The Weeknd, Lady Gaga, and Metallica, and the 2026 roadmap includes highly anticipated Rap, Rock/Metal, and Country seasons. Predictions for 2026 headliners include Kendrick Lamar, Linkin Park, and Chappell Roan.

Technically, the mode is expected to introduce pro vocals and harmony support, turning the game into a karaoke powerhouse that can challenge dedicated music games. With over 285 tracks available by late 2024 and weekly additions of Jam Tracks, Fortnite Festival has become a major distribution channel for the music industry, allowing artists to reach millions of fans through interactive gameplay.

The Platform Has Matured

The headline of this paragraph signifies the monumental shift Fortnite has undertaken: it’s no longer a singular game. It’s a multifaceted institutional platform.

By integrating professional development tools (UEFN), opening the doors to rival engines (Unity), and building direct-to-consumer commerce systems, Epic Games has effectively decentralized the game’s growth. The platform no longer relies solely on Epic’s internal development cycles but is instead propelled by the collective creativity and marketing power of hundreds of thousands of developers and the world’s largest IP holders - with the winds of the cultural Zeitgeist blowing into its sails.

The success of The Simpsons and South Park rollouts demonstrates that Fortnite can serve as a premium distribution channel for narrative and thematic content, while the Disney partnership suggests a future where digital and physical entertainment are seamlessly integrated. With 650 million registered users and a creator economy that has already paid out nearly a billion dollars, Fortnite is not merely existing. It is defining the infrastructure of the next generation of digital experience.

For developers, brands, and players alike, 2026 stands as the year Fortnite matured into a true persistent universe, a game front that serves as the central hub for the global interactive economy. The question is no longer whether brands should be in Fortnite. It’s how quickly they can get there before their competitors do.

What brands do you think will make the biggest splash in Fortnite this year? Let me know in the comments.

I will be speaking at one of Europe’s largest tech and marketing conferences, DLD Munich, this week. In focus: the power of video gaming and how every company can harness the power of play. Subscribe today to get the behind-the-scenes chatter of what top executives of leading brands like Henkel, Adidas, or BMW are saying.

The AI industry has a problem, and it’s not the one you think. It’s not hallucinations, safety concerns, or regulatory pressure. It’s hunger. An insatiable, relentless hunger for data that grows exponentially with each model improvement. And that hunger is about to trigger a wave of acquisitions that will make the tech M&A boom of the 2010s look quaint by comparison.

Case in point: OpenAI is reportedly in discussions to acquire Pinterest. While the exact terms haven’t been disclosed, with Pinterest’s current market cap hovering around $17 billion, a deal with the typical acquisition premium would likely land somewhere in the $25-26 billion range. For context, OpenAI is reportedly preparing for an IPO that could value the company at over $1 trillion. The math might seem asymmetrical, but for a company pursuing trillion-dollar ambitions, spending 2.5% of your valuation to acquire a critical data asset is a no-brainer. Plus: Pinterest seems to be ripe for the picking. Over the past five years, its stock is down 62%.

Yes, the stock was likely inflated during Covid. But just to compare. In the same period, Meta’s stock is up 141%. The comparison is even more staggering when looking at the stock performance across the stocks’ lifetime:

Pinterest: up by 14%.

Meta: up by 1,444%.

But here’s what matters more than the price tag: OpenAI knows Pinterest isn’t just a collection of recipe boards and home décor inspiration. It’s a treasure trove of visual intent data that represents the holy grail for AI companies racing to dominate e-commerce, advertising, and the next generation of search. More importantly, it’s data that OpenAI currently doesn’t have access to. And in the AI arms race of 2026, the companies that control the most diverse, highest-quality datasets will be the ones left standing.

Why Pinterest Makes Perfect Sense for OpenAI

OpenAI needs visual data at scale. ChatGPT and its suite of tools have conquered text. GPT-4 and its successors can write, reason, code, and analyze with stunning proficiency. But visual understanding, especially the kind that translates into commercial action, remains a frontier that OpenAI hasn’t fully cracked.

Enter Pinterest, a platform built entirely on visual discovery and purchase intent. The company hosts billions of pins across millions of boards, serving over 553 million monthly active users as of late 2024. Every single pin represents a moment of consumer intent. Someone looking for a specific style of furniture. Another person planning their wedding. A third researching their next vacation destination. This isn’t passive scrolling like Instagram or TikTok. Pinterest users are actively searching, curating, and signaling what they want to buy, create, or experience.

For Sora, OpenAI’s text-to-video model, Pinterest’s visual corpus offers something money can’t easily buy: contextual understanding of how real people think about and organize visual concepts. It’s one thing to generate a video of “a modern kitchen.” It’s another entirely to understand the dozens of different aesthetic subcategories that Pinterest users have organically created around modern kitchen design, complete with color palettes, material preferences, and lifestyle contexts.

But the visual data is only half the story. Pinterest has something even more valuable: a functioning e-commerce engine and advertising platform that generated over $4 billion in revenue in the twelve months ending September 2025, up from $3.65 billion in 2024. The company has shown consistent growth, climbing from $2.58 billion in 2021 to its current run rate. OpenAI has made no secret of its ambitions to bring shopping directly into ChatGPT. The company has experimented with product recommendations and affiliate partnerships, but building a full-fledged commerce and advertising business from scratch would take years.

Pinterest gives OpenAI a shortcut. A proven platform with existing advertiser relationships, conversion tracking, and most critically, user behavior data that connects visual inspiration directly to purchase decisions. Imagine ChatGPT not just recommending products but understanding the aesthetic journey that leads someone from “I need new living room furniture” to clicking “buy now” on a specific velvet couch.

The social networking component shouldn’t be overlooked either. Pinterest’s 553 million monthly active users have explicitly opted into a platform about discovery and curation, with particularly strong growth in international markets outside North America. OpenAI could transform ChatGPT from a tool you use in isolation to a social experience where you can share AI-generated content, collaborate on projects, and discover what others are creating.

The Data Gaps That Keep AI CEOs Up at Night

Pinterest represents one category of data that LLMs desperately need. But step back and look at the broader landscape, and you’ll see massive gaps in what these models can access. These gaps represent billions, potentially trillions, of dollars in untapped business opportunities.

Real-Time Behavioral Data Across Apps and Devices

LLMs today are trained on static datasets. Web scrapes, books, academic papers, licensed content. What they don’t have is the behavioral exhaust that accumulates every time you open an app, click a link, or hover over a product before scrolling past.

Google has this data. Meta has this data. Apple has this data. The AI companies largely don’t. And this behavioral data is the key to understanding not just what people say they want but what they actually do. This is a big reason why OpenAI is getting into the web browser space. Expect AI companies to pursue partnerships or acquisitions with mobile analytics platforms, app developers, and potentially even device manufacturers. The goal is closing the loop between language understanding and actual human behavior in digital environments.

Social Graph and Relationship Context

Current LLMs understand language but struggle with social context and relationships. They can’t easily grasp that the way you talk to your boss is different from how you talk to your best friend, or that your recommendation for a restaurant should factor in who you’re dining with and what the occasion is.

Social networks have spent two decades building graphs that map human relationships, contexts, and social norms. This relationship data is extraordinarily valuable for AI applications in communication, collaboration, and personalization. An AI that understands your social graph doesn’t just help you draft an email, it helps you navigate the complex social dynamics of workplace communication or friend group planning.

Pinterest gives OpenAI a lightweight social graph focused on taste and aesthetic preferences. But don’t be surprised if we see more aggressive moves toward companies with richer relationship data. Discord, with its community-centric model, would be fascinating for any AI company looking to understand how people collaborate and communicate in groups.

Commerce Intent and Transaction Data

AI companies want to power the next generation of shopping, but they’re missing actual transaction data. They can recommend products based on descriptions and reviews, but they don’t know what people actually buy, what they return, what they buy together, or how their purchase behavior changes over time.

E-commerce platforms like Amazon, Shopify, and payment processors like Stripe sit on this data. OpenAI’s Pinterest acquisition addresses part of this by capturing pre-purchase intent, the research and inspiration phase. But the post-purchase data remains largely out of reach. Expect partnerships between AI companies and e-commerce platforms to accelerate.

Geospatial and Physical World Data

LLMs excel in digital spaces but struggle with physical world reasoning. They can describe how to get from point A to point B, but they don’t have the rich geospatial data that makes that direction useful in real-world contexts.

Companies like Google (Maps), Uber, and spatial computing companies like Niantic that have built detailed maps of the physical world through user-generated gameplay data have enormous value. This data becomes even more critical as AI moves from purely digital interactions to powering robots, autonomous vehicles, and augmented reality experiences.

A maybe surprising highly valuable data source for geospatial and world data? Video games. OpenAI offered $500 million to acquire gaming company Medal including its data asset of video gaming data.

Geolocation data is the key to relevancy in advertising and product recommendations. An AI that knows you’re currently in Manhattan rather than rural Montana can surface completely different suggestions. More importantly, geolocation enables proactive assistance. Your AI doesn’t wait for you to ask about dinner options, it knows you’re near a neighborhood you’ve never explored and suggests places you’d love based on your preferences and current location. This transforms AI from reactive to anticipatory.

Psychological and Psychographic Data

Here’s the data category that most people aren’t talking about yet, but will define the next generation of AI personalization: psychological profiles and psychographic data. Current AI systems understand what you do, but they struggle with why you do it.

This is changing rapidly. The global behavior analytics market was valued at $1.1 billion in 2024 and is projected to reach $10.8 billion by 2032. Companies are building what industry experts call “behavioral AI” by coding behavioral science directly into their systems. Organizations like Mind Friend are scaling human expertise through AI by connecting with over 500 licensed psychologists, psychiatrists, and neuroscientists to create what they describe as “behavioral infrastructure.” Solsten has built a large database comprised of medical-grade psychological profiles connected to consumer affinities and preferences.

The implications for AI companies are profound. Psychological data unlocks true personalization in ways that behavioral data alone cannot achieve. Understanding that someone is risk-averse versus thrill-seeking, or motivated by social validation versus personal achievement transforms how an AI can communicate, recommend, and persuade.

For social graphs, psychological data adds a critical dimension. It’s not just knowing who you’re connected to, it’s understanding the psychological dynamics of those relationships. For advertising and commerce, psychological intelligence is the difference between showing someone a product and knowing exactly how to frame that product to drive conversion.

Early adopters like Clarity AI are already processing hundreds of thousands of data points daily to detect behavioral patterns. Companies like IBM and Adobe are investing heavily in behavioral analytics, recognizing that understanding human psychology is as important as understanding human behavior.

The challenge is data access. Unlike behavioral data that can be observed through clicks and scrolls, psychological data requires more sophisticated collection methods. Expect AI companies to pursue partnerships with mental health platforms, personality assessment tools, and companies that sit on rich psychographic datasets.

The Business Models Data Unlocks

Each of these data categories doesn’t just make models smarter. They unlock entirely new business models that transform AI from a utility into a platform.

Native Commerce in Conversational Interfaces

With the right visual intent data and commerce infrastructure, ChatGPT doesn’t just answer questions, it becomes a shopping destination. You describe what you’re looking for, the AI understands your aesthetic preferences, and it can complete the transaction without you ever leaving the chat.

The market opportunity here is staggering. Global e-commerce is valued at approximately $29-31 trillion as of 2024, with projections showing it could exceed $80 trillion by 2030. If conversational commerce captures even 1-2% of that market over the next five years, we’re talking about a $800 billion to $1.6 trillion opportunity.

Advertising That Understands True Intent

Current digital advertising relies on proxies for intent. Keywords you searched, pages you visited, content you engaged with. But with rich behavioral data, social graphs, and commerce history, AI companies can build advertising platforms that understand intent at a level that makes current targeting look primitive.

Imagine ads that don’t just target demographics or interests but understand exactly where you are in a decision-making process, what barriers are preventing you from converting, and what specific message would be most likely to drive action. Pinterest’s advertising business already does a version of this in the visual discovery space. Scale that across all of ChatGPT’s interactions and you have an advertising platform that could challenge the established players.

Subscription Services Powered by Proprietary Data Access

AI companies are already charging for access to more powerful models. But what if the real premium isn’t model capability but data access? A ChatGPT Pro subscription that gives you AI assistance with deep integration into your social graph, commerce history, and behavioral patterns becomes significantly more valuable than a basic chatbot.

This is why enterprise AI is exploding. Companies will pay enormous sums for AI that understands their specific data, workflows, and business context. The consumer version of this is an AI that knows you deeply, and that level of personalization requires data that goes far beyond what you type into a chat box.

What Comes Next

The OpenAI-Pinterest deal, if it closes, won’t be the last major AI acquisition of 2026. It will be the opening salvo in a data land grab that reshapes the technology landscape. Every major AI company is looking at their data gaps and making acquisition lists.

Google already has substantial data advantages through Search, Maps, YouTube, and Android. That’s why they’ve been able to compete so effectively. Their data advantage is enormous.

Anthropic, despite making Claude increasingly competitive on capability, faces a data disadvantage that will eventually limit growth unless they pursue partnerships or acquisitions. Meta has social graph and behavioral data but lacks the commerce intent that OpenAI is pursuing. Amazon has commerce data but needs better social and visual understanding.

The next 18 months will be defined by which companies successfully acquire the data they need to unlock new business models. And just like the platform wars of the 2010s, the winners won’t necessarily be the companies with the best technology. They’ll be the companies with the best data.

OpenAI understands this. That’s why they’re pursuing Pinterest. It’s not just an acquisition. It’s a statement about what it takes to win in the next phase of AI development. Data isn’t the new oil. It’s the new oxygen. And the companies that can’t breathe deeply enough won’t survive.

What’s your take? Which company should AI players acquire next? Let me know in the comments below.

2026 is off to a hot start. This week, beloved TV show South Park is launching in the video game Fortnite. It’s one of the biggest entertainment collaborations this year - with big implications for the entertainment and gaming industries as well as the cultural Zeitgeist. Subscribe below to join the conversation.

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Happy New Year. I hope that you had a wonderful New Year’s Eve and that you got to spend it with your favorite people, and of course the Stranger Things finale that dropped at 8pm ET on Dec. 31st. If you haven’t been able to watch it yet, I won’t spoil it for you. I’ll just say this: unlike other successful shows like Game of Thrones that struggled to deliver a closing worthy of the epic run the shows had, the Duffer Brothers and the Stranger Things cast delivered. The 2-hour finale was everything it could have been and an ending that did right by the show’s 10-year run.

The impact of Stranger Things on Netflix’s success cannot be overstated. After Volume 2 of the fifth and final season was released, Season 5 racked up a total of 34.5 million views during the week of Dec. 22-28. Across all seasons, the show has officially surpassed 1.2 billion views on Netflix. While the official numbers for the final episode haven’t been released yet, I wouldn’t be surprised if it was Netflix’s single best release of all time.

Stranger Things capped off a wild year for the entertainment and gaming industries with major developments that will reverberate far into the new year and beyond (you can revisit my headline review here). Now that the calendar has turned, it is time to dive into what I believe will be the most important developments this year.

I’ve put together seven bold predictions that will reshape the worlds of entertainment and gaming as we know them. Some may seem obvious. Others will be non-obvious at all. All of them are bold. Plus: I intentionally stayed away from any predictions that include “AI will change [insert name of random industry]”. You’ve already seen enough of those and given the omnipresence of AI, they don’t qualify as predictions anymore.

You deserve better.

Without further adieu, here are seven bold predictions for entertainment and gaming in 2026.

#1 EA Becomes the Premier Destination for Sports and Entertainment

It’s in the game! Never in the history of the company will Electronic Arts’ tagline have been more spot on than in 2026. After the announced buyout by the private equity consortium for $55 billion is completed, expect some major changes. The new owners will go in and leave no stone unturned. That includes a radical focus on sports and only the major franchises with established fanbases and transmedia potential. With Saudi Arabia’s ownership going up to 90% post closing of the transaction, the Kingdom will effectively be calling the shots going forward. They understand better than anyone the cultural and societal importance of sports, which is why they invested so heavily into the football (soccer) Saudi Pro League. Where gaming and football crossover is where 3.4 billion players collide with 4.5 billion football fans. It’s the world’s biggest medium and its biggest sport joining forces.

Prediction: Watch out for EA to acquire exclusive live streaming sports rights and bring live sports to its sports-focused gaming franchises with real-time updates, news, social, commerce, and potentially sports betting. It’s the foundation for a premier sports and media subscription offering that ESPN+ was trying to be.

#2 Disney Becomes an M&A Target and Is Bought

Yes, you read that right. I think the bidding war over Warner Bros. Discovery was just the starting gun on a wave of consolidation in the entertainment space unprecedented in scale. There will be no sacred cows and no place to hide, and Disney is still the crown jewel of the entire industry. Yes, its business is performing well. Disney’s streaming service Disney+ has grown from 73 million to 131 million users in the last five years. Its theme parks business is the gift that keeps on giving. But the reality also is that Disney’s stock has underperformed the market and its stock price is on the same level where it was 10 years ago.

These are the perfect conditions for private equity or a strategic buyer to come in. Disney already had to fend off activist investors in the past. Plus, Disney CEO Bob Iger is on his way out and he’s a dealmaker that likes to go out with a bang (before his first term as CEO ended in 2020, Iger-led Disney bought 21st Century Fox for over $71 billion).

Prediction: Disney’s market cap sits just above $200 billion. Add a 30-50% premium on top and you get to a price range Disney shareholders and its board couldn’t say no to. The reality is there’s only a few players that could pull this deal off. At the top of the list: Apple. It would bolster its Apple TV+ subscription offering and give them a lucrative brick and mortar business (theme parks) that together with Apple’s tech and experience capabilities could thrive even further. At a market cap of $4 trillion and with $55 billion in cash on its balance sheet Apple could acquire Disney and cement Tim Cook’s legacy before he hands over the reins.

#3 Netflix Wins the Battle Over Warner Bros. Discovery for Good

Ultimately, all further bids from Paramount-Skydance are rejected by the WBD board and shareholders. It is clear that they want to go and join forces with Netflix. When even the requested personal guarantee of the billions behind the Paramount offer by billionaire Larry Ellison isn’t enough to sway WBD shareholders, nothing else is. Paramount will go to great lengths to fight the Netflix-WBD deal in court, hoping for an intervention by the Trump administration and the FCC, but ultimately fall short.

Prediction: Paramount has vast ambitions and is very serious about becoming a dominant force in a completely reshaped Hollywood. After missing out on WBD, it will take its $100 billion war chest and go shopping elsewhere.

#4 Roblox and Take-Two Interactive Become Serious Acquisition Targets

See above on #3. The Ellisons will be going on a shopping spree and after missing out on WBD and realize that the WBD gaming assets, while attractive, were insufficient for their overall interactive entertainment strategy and the crucial role gaming plays within that. Paramount decides to consolidate the streaming market downstream and acquire smaller players, plus a couple of Hollywood production studios like A24. Most importantly, they spend the bulk of their money on a premier gaming company. With EA already taken off the board, two high profile names make the most sense: Roblox and Take-Two Interactive.

Prediction: Roblox’s current market cap of roughly $57 billion might make this a bit too expensive if you price in a premium of 30-50%. However, Paramount, especially with the backing of Oracle, could add value to Roblox’s efforts in building out a thriving advertising business. Leveraging the connections to the newly formed TikTok US, you could see valuable synergies in the short form video arena related to Roblox’s gameplay content. But in my view, the gangster move here is for Paramount to acquire Take-Two Interactive. Its market cap sits at $46.5 billion, so even with a 50% premium and a total price of $69.75 billion, the Ellisons would have plenty of cash left to spend on the studio and streaming side. A price for Take-Two in this range is justified and puts it just above what Microsoft paid for Activision Blizzard. Paramount gets access to one of the biggest franchises in gaming history, GTA, with a new and highly competitive creator economy coming out. They also get Zynga, still a mobile gaming powerhouse with tremendous publishing capabilities. You combine the gaming chops of Take-Two across all gaming platforms and combine it with Paramount’s IP library. It’s a home run.

#5 A Major IP Holder Licenses Its Library to Gemini

Disney and OpenAI set the stage with their deal that saw Disney license 200 of its iconic characters exclusively to OpenAI’s model Sora. IP holders realize that IP will make its way onto every screen and wherever the consumer is, regardless of whether they like it or not. Given the current regulation, it’s nearly impossible to prevent piracy and IP usage that infringes on their copyrights anyway, so you might as well play offense like Disney.

Prediction: Netflix, Comcast (Peacock), and Paramount. One of these three will sign a deal similar to what Disney did and license their IP. Not to OpenAI. This time, the IP will go to Gemini. As Google becomes a stronger competitor to OpenAI almost weekly in the AI consumer space, they have to make a move. Pairing world-class IP with Gemini and Google’s Nano Banana model is a no brainer.

#6 A Large Telco or Bank Goes Big Into Gaming

What do telecommunication companies and banks have to do with gaming? At first sight, not a whole lot. But on second thought, gaming is a key part to solving one of the biggest issues that telcos and banks have been dealt at the hands of the big tech companies: their customer relationship has eroded to the point where the consumer interface is largely owned by tech companies and telcos and banks, for the most part, have a solely transactional relationship with consumers. Gaming is the antidote as it allows them to increase the proximity to both their existing as well as future customers.

Prediction: We will see a large non-endemic make a big move and get into gaming. This will include buying gaming studios, investing heavily into developers and publishers, and signing distribution agreements where game developers get access to the billions of customers that single telcos have access to on a daily basis.

#7 A Gaming Publisher Bets on Short Form Video and Enters Social Media

Short form video is the fastest growing content format online. Over 90% of Gen Z and Millennials watch short form videos on platforms like TikTok or Instagram. At the end of 2025, 82% of global internet traffic was expected to be video content, with short form video representing the bulk of that. We have trained our brains for short form consumption and fast dopamine releases, and these reduced attention spans are posing a serious threat to video games that can require players to invest longer periods of time and focus their attention in order to enjoy and progress in the game. Both video game developers and publishers will wake up to this fact and rethink gaming content in a world dominated by short form video.

Prediction: A large gaming publisher will get into social media using short form video content driven by its gaming portfolio by launching its own consumer-facing service. It’s the ultimate fandom meets social meets content engine and short form video is outpacing every other content form at rapid speed, challenging games that depend on sustained attention over prolonged periods of time.

2026 will be a remarkable year with unprecedented deal activity and bold moves where no company is safe. Gaming and entertainment will collide even further and set the foundation for the future of immersive entertainment - including what it takes to win and the players going after it.

I will be covering the major events across tech, gaming, and entertainment twice a week throughout the entire year. With exclusive takes, behind the scenes insights and access to some of the power players shaping this new era, Technically Entertaining is a great spot for you to stay in the know and understand what moves you can make. I hope you join us - subscribe for free today.

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I hope a peaceful and restorative Christmas lies behind you and that you’ve had the opportunity to reflect on this past year as well as look ahead with both excitement and anticipation. My wife just a few days ago asked me if I was familiar with the concept of “Raunächte”. It refers to the mystical time period of the 12 nights between Christmas Eve and Epiphany (Dec. 24 - Jan. 6), which is rooted in Germanic and Celtic tradition and describes the phase “between the years” - representing the 12 months of the past year and a time for reflection, cleansing, and manifesting intentions, involving rituals like smudging with herbs, journaling dreams, and decluttering to release the old year and welcome the new with clear energy and focus.

I wanted to burn sage immediately. If you haven’t started with your reflections yet, you still have a few days before the three Kings show up at your door.

To help you with your own reflections and the decluttering of your mind, here are my top 10 headlines across tech, entertainment, and gaming of 2025. These are in no particular order, but they all have one thing in common: they epitomize fundamental shifts that will reverberate far into the new year and beyond.

#1 Electronic Arts Taken Private in Largest Gaming LBO in History

EA was the crown jewel of North America’s gaming industry. In a move that sent shockwaves through Wall Street, a consortium of private equity buyers took the iconic game developer and publisher of legendary franchises like Madden, FIFA, NHL, College Football, Plants versus Zombies, and Skate private for a total of $55 billion -the largest leveraged buyout in gaming history.

What’s most important about this deal is who’s behind the $55 billion. Saudi Arabia’s Public Investment Fund (PIF) increased its stake in EA via this deal to 90%, giving the Kingdom near-total control over one of the West’s most valuable gaming companies. This follows PIF’s $38 billion investment in its gaming division Savvy Games Group in 2022. When it comes to gaming, investing in this space, and making it an integral part of the economic and cultural fabric of the Kingdom, the Saudis mean business.

#2 Roblox Breaks Every Conceivable User Record

Gaming platform Roblox will look back on 2025 and feel pretty good about itself. Roblox shattered not one, not two, but three records that demonstrate just how dominant user-generated content platforms have become in the entertainment landscape.

Over the summer, the game Grow a Garden broke the Guinness World Records achievement for most concurrently played video game, with 21.6 million users playing simultaneously. Then, in September, Steal a Brainrot beat that record, reaching over 25 million concurrent users. But the most meaningful record was broken on August 23 when 47.3 million users were on the platform and playing simultaneously - the most ever on any gaming platform, surpassing even Steam’s previous peak.

Roblox now counts 151 million daily active users (and growing), with the platform’s virtual economy generating $3.2 billion in revenue over the past year. For context, that’s more than the GDP of some countries. The implications for entertainment IP holders are clear: if you’re not thinking about how your franchises live in UGC platforms, you’re already behind.

#3 Paramount and Skydance Finally Merge

More than a year after the deal was first announced, Skydance Media finally acquired Paramount Global for $8 billion to merge the two companies and form the new Paramount, a Skydance Corporation. The finalized transaction set the stage for a flurry of licensing deals (including a major UFC partnership) in an attempt to create the next-gen entertainment powerhouse that brings together content creation and gaming distribution backed by state-of-the-art tech infrastructure from Oracle.

David Ellison, with the financial backing of his father Larry Ellison (whose net worth exceeds $200 billion), restructured the organization immediately post-merger. Most notably, Paramount Games was elevated from the consumer goods division to its own content pillar, sitting alongside movies and streaming. This wasn’t just an org chart shuffle. It was a statement about where entertainment is headed. Then the Ellisons went even bigger...

#4 Paramount-Skydance Bids for Warner Bros. Discovery, Triggering Epic Bidding War

Only to see streaming giant Netflix win the race for Hollywood’s crown jewels across studios and streaming (HBO!). Almost everyone expected Paramount-Skydance to walk away with WBD, but Netflix and Comcast came to bat and really took a swing here with Netflix ultimately hitting a home run and seeing its near $83 billion bid accepted.

This acquisition would give Netflix instant ownership of HBO, Warner Bros. Pictures, DC Studios, Warner Bros. Games, and the most prestigious content library in Hollywood history. For Netflix co-CEO Ted Sarandos, this represents the culmination of a strategy that began when Reed Hastings identified Fortnite as Netflix’s biggest competitor back in 2019. This saga is far from over and the Ellisons will pull every string they can to hijack this deal, but for now Netflix is preparing to bring one of the most attractive content libraries to its service.

#5 Epic Games Brings The Simpsons to Fortnite in Masterclass of Transmedia Storytelling

Fortnite creator Epic Games brought the iconic show The Simpsons to its video gaming universe - and people LOVED it. What was even more profound than the extremely authentic representation of the city of Springfield in all its intricate details was the strategic execution of this collaboration between Epic Games and Simpsons’ owner Disney across multiple platforms and content formats.

People weren’t simply able to play a Simpsons game in Fortnite. They could tune in on the streaming service Disney+ to watch short-form, curated mini-episodes of The Simpsons that actually took place in Fortnite. Homer appeared in-game while simultaneously his Fortnite adventures aired on Disney+. The synergy was unprecedented.

The way the two companies strategically orchestrated this launch, with coordinated drops, cross-platform storytelling, and a 30-day content roadmap, will serve as a blueprint for many more transmedia initiatives in the coming years. Disney CEO Bob Iger called it “the model for how our IP will live in gaming going forward.”

#6 Unity and Epic Games Become Friends (Wait, What?)

Arch rivals turned partners in the year’s most shocking announcement. Many people who were in the audience in Barcelona for game engine maker Unity’s flagship conference Unite couldn’t believe it when Epic Games, maker of rival game engine Unreal, walked on stage to announce a newly established partnership together with Unity’s CEO Matthew Bromberg.

This unprecedented partnership will see Epic Games open up its Fortnite universe and allow game developers and creators to bring their games made in Unity to the Fortnite universe. Previously, Fortnite’s UEFN (Unreal Editor for Fortnite) only supported Unreal Engine, limiting which creators could build experiences for the platform.

It’s a move that strengthens both companies and sets Epic Games up to truly position Fortnite as a platform with competitive UGC elements that can rival Roblox. With over 500,000 developers using Unity globally, this partnership instantly expands Fortnite’s potential creator base by millions.

#7 GTA VI Delayed (Again), But the Wait Might Be Worth It

Everyone was getting ready for November when Rockstar Games, developer of the iconic Grand Theft Auto franchise, announced that it would delay the launch of the newest instalment GTA VI to November 2026. It marks the second delay for the most anticipated video game in history.

It’s a game that is expected to generate billions of dollars in revenue for parent company Take-Two Interactive. Analysts project $1 billion in first-week sales alone. More importantly, it is rumored to include a full-fledged creator economy and UGC features, which would pit GTA directly against Fortnite and Roblox in the battle for the metaverse. Industry insiders suggest the delay is specifically to perfect these creator tools, which could transform GTA from a game into a platform. We’ll find out this year (maybe).

#8 Mobile Gaming M&A Heats Up as Industry Consolidates

Mobile games saw a flurry of big deals, with some very popular and successful franchises changing hands in what became the most active year for mobile gaming M&A since 2021. The deals signal a broader trend: mobile gaming is maturing, and scale matters more than ever.

Aristocrat sold Plarium (Raid: Shadow Legends) to MTG for $620 million (and another $200 million based on performance). In order to focus on its AI efforts in advertising, adtech giant AppLovin sold its entire gaming portfolio to Tripledot Studios for $800 million. And Niantic decided it had learned enough for its spatial computing software from the geolocation data generated by its juggernaut Pokémon Go that it was time to cash in and focus, selling Pokémon Go to Saudi-backed Scopely for a rumored $3.5 billion.

The common thread? Companies are either doubling down on mobile or exiting entirely. There’s no middle ground anymore.

#9 Netflix and Spotify Join Forces to Fight YouTube

2025 brought us another unlikely partnership between two competitors. Streaming behemoths Netflix and Spotify teamed up to bring select Spotify video podcasts to Netflix’s platform.

This move is directed at fending off YouTube by bringing Netflix subscribers more fresh content that doesn’t cost nearly the same as the next episode of Stranger Things to produce (the average podcast costs 95% less per hour than scripted content). This is Netflix’s way of dipping its toes into the waters of creator content—a strategy they’ll have to expand on the more the YouTube content model continues to dominate engagement metrics.

YouTube currently commands over 1 billion hours of watch time per day on TV screens alone. Netflix is playing catch-up, but with over 300 million subscribers and Spotify’s over 700 million monthly active users, this partnership has real teeth.

#10 A Minecraft Movie Becomes Box Office Phenomenon

$958 million. That’s how much video game adaptation A Minecraft Movie made at the box office, despite many critics initially doubting whether the blocky aesthetic would translate to cinema.

Not only was it one of the highest-grossing movies of the year, it also became the second highest-grossing video game adaptation of all time, only behind The Super Mario Bros. Movie ($1.36 billion). The film’s success proves what many in the industry have known for years: gaming IP, when handled with care and authenticity, can rival traditional Hollywood franchises at the box office.

This success will only further accelerate the flywheel between gaming and entertainment, with studio executives increasingly looking into platforms like Roblox and Fortnite to identify high-potential gaming franchises that are ripe for the big screen. Warner Bros. Discovery has already announced it’s greenlighting a Roblox movie for 2027.

The Thread That Connects Everything

Looking across these 10 headlines, a clear pattern emerges. The walls between gaming, streaming, social media, and traditional entertainment aren’t just blurring. They’re collapsing entirely. The companies that recognize this convergence and restructure accordingly (Paramount-Skydance) are positioning themselves to win. Those that don’t risk becoming irrelevant.

Saudi Arabia isn’t investing $90+ billion in gaming because they like video games. They’re investing because they recognize that gaming is becoming the dominant entertainment medium of the 21st century. Netflix isn’t bidding $83 billion for Warner Bros. Discovery just for HBO. They also want Warner Bros. Games. Epic and Unity aren’t partnering out of goodwill. They’re acknowledging that the future of gaming is platforms, not just games.

The entertainment industry of 2026 will look fundamentally different than the one we knew in 2024. These 10 headlines aren’t just reviewing what happened in 2025. They’re previewing what’s coming next.

Stay tuned for our predictions for 2026. We’ll be publishing those in the first week of January. Until then, enjoy your Raunächte, burn some sage, and get ready for a year that will make 2025 look tame by comparison.

Have thoughts on what I missed or what should have made the list? Drop a comment below.

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As the year is drawing to a close, your social feeds and inboxes are filled with reviews of 2025 and predictions for the new year. You may have been wondering what is taking your favorite tech and entertainment newsletter this long to join in on the fun. Well, Christmas prep with two kids is part of the answer. The other part is I didn’t feel comfortable calling it a year before the calendar truly turns to 2026. After all, there was (and is) no counting out 2025 and the possibility of this year pulling another rabbit out of its hat at the last minute. Keep in mind, this year was only nine days old when Chinese company Tencent was designated as a military company and Meta CEO Mark Zuckerberg started to dress like Kendrick Lamar.

The article was titled “Unpacking Zuckerberg’s Midlife Crisis.” There are things money can’t buy after all.

I wonder how many days it’ll be in the new year until we all have a collective “oh shit” moment. I personally hope it’ll be a moment. Dealing with the rapid pace of technological developments and progress is one thing. That’s manageable, even fine. But I think we could all do with less amplitudes of the batshit craziness that’s surrounding all of us.

Before we get to look ahead at 2026, we first need to look in the review mirror. Aside from predictions for the new year and a wrap up of the major headlines of 2025 that moved the worlds of tech and entertainment (be sure to subscribe below to miss these posts coming your way after Christmas), today we’ll take a hard look in the mirror and assess how I did with my predictions for this year.

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Santa came bearing gifts in the form of a report card. Without giving too much away before digging into the details, let’s just say it feels like a solid C+ - there’s definitely room for improvement when it comes to my 2026 predictions.

Let’s take a look at the four predictions I made at the beginning of the year plus one late entry.

Prediction #1: The battle for network efficiency

The full body combat in the advertising space between the ad networks and who can provide marketers the most effective and efficient access to the most valuable customers and send them their way was on full display. The winning networks need to internalize unique data to find different and stronger signals to make their ad network the smartest and send the right ad to the right user. I predicted that AppLovin would be active on the M&A front to bolster its capabilities, Chartboost would be spun out of Zynga, Roblox would accelerate its ad platform business, while the TikTok ban would throw a wrench into marketers’ plans and Meta would be the big beneficiary.

What actually happened. AppLovin sold off its entire gaming business to Tripledot but did not make any major acquisitions itself. Chartboost is still a part of Zynga. Roblox made a concerted push with its ad platform though it’s still in its infancy. TikTok wasn’t banned. Unity emerged as a potentially viable competitor to AppLovin with its new ad platform that uses in-game monetization data.

Grade. Directionally right but the specifics didn’t land. C-.

Prediction #2: AI needs different data to overcome its plateau

AI companies still need different and quite frankly all the data they can get to train their models and establish meaningful differentiation against their competitors. But even more than searching for unique data assets this year, AI as a whole seemed like it was looking for a real world use case in order to demonstrate tangible real world impact beyond efficiencies (read: cost savings).

What actually happened. Aside from a number of licensing deals for a variety of data sources and IP, AI players like OpenAI were actively looking to acquire companies that possess unique data. Case in point: the rumored $500m OpenAI was ready to drop on a little known company called Medal, which has amassed a sizeable data asset containing videos of gameplay footage. Instead of joining Sam Altman and team, the founders turned down the offer and spun out a new AI lab called General Intuition, which uses the visual data set to build AI world models. Otherwise the focus for the big AI players seemed to be compute, infrastructure, and the search for a business model to support all of the promise currently baked into the lofty valuations.

Grade. Close but not quite there. B-.

Prediction #3: We’re entering the age of podcasting

On the back of the huge role podcasting played in the US presidential election, I expected new streams of money to flow into the space, both to put $$$ behind advertising and to develop new content formats. I especially anticipated video to play a big role and that YouTube, Netflix, and Spotify would all be involved or ultimately clash over this.

What actually happened. Podcasting is on track to receive more than $5bn in advertising spend this year. While year-over-year growth has slowed down just a little bit and is projected to come in at around 8% this year, video podcasting has exploded with 100% year-over-year growth. Netflix teamed up with Spotify to bring video podcasts into its streaming app while acquiring popular podcasts oftentimes targeted at very specific audiences, like hockey fan favorite Spittin’ Chiclets (a move that in turn will see all of the video podcasts removed from YouTube). Lastly: the Golden Globes announced that the next award ceremony will have a dedicated category for podcasts.

Grade. Bullseye. A.

Prediction #4: The ongoing consolidation of legacy media

Comcast set the tone in 2024 by announcing the spin off of its cable TV assets into a new entity called the Versant Entertainment Group. The expectation was that Warner Bros Discovery would spin off its own cable TV assets, merge them with Versant, and continue the inevitable consolidation in legacy media.

What actually happened. Well. Netflix and Paramount-Skydance decided to both bid for Warner Bros Discovery in a move that would redefine the entertainment landscape forever. This battle for WBD has put the expected consolidation on hold (for now). While Netflix would split the cable TV assets to then likely merge them with Versant, Paramount-Skydance would instead acquire these assets and merge them with their own legacy media networks like CBS. Starz apparently bid $25bn for WBD’s cable assets.

Grade. Big curveball that delayed the inevitable. D+.

Prediction #5: Ubisoft will never be the same again

French gaming darling Ubisoft was in troubled waters going into this year. Missed revenue forecasts, delayed game launches - it looked like the end was near for Ubisoft and it would be taken private via an acquisition from a strategic or private equity group.

What actually happened. Ubisoft is still a publicly traded company. But underneath the surface, it created a new subsidiary that effectively owns all of Ubisoft’s notable franchises and IP - and is in large part financed and controlled by Tencent.

Grade. The patient isn’t dead. But it’s also not the same patient it was before. B.

Overall, I think that means a C+. A solid baseline to improve on - but then again, making predictions isn’t about being right. It’s about starting a conversation.

With that, Merry Christmas! I hope the holidays offer you space to slow down, to reconnect with what energizes you, and to spend time with the people that matter most. Thank you for being part of the Technically Entertaining community, and share the love by spreading the word at the dinner table - or by sending this post to someone in your network using the button below.

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The year is quickly coming to a close. While we all deserve some much needed time off, you also deserve to stay in the know and be equipped for the new year. That’s why you’ll still get our 2025 headlines overview, predictions for 2026, and a special edition on the top skill that will set you and your business apart in the new year. Want to share a Christmas gift with me? Subscribe now.

“Stories need truth to have longevity and last.”
- Halley Gross, Writer on The Last of Us Part 2 and The Last of Us Season 2.

Dear Readers,

The Hollywood and Games Summit in Los Angeles earlier this month made two things very clear. The worlds of entertainment (movies, television) and gaming are converging in real time. At the heart of what future-proof entertainment enterprises will look like will be video games. In pursuit of stretching entertainment IP across screens and media formats to reach and engage as many people as possible, nothing rivals the effectiveness of gaming.

Many firms in Hollywood and far beyond have attempted to succeed at making gaming a core part of their overall strategy, with very mixed results. Make no mistake: making games is incredibly hard. Scaling them might be even harder in today’s market environment.

Look no further than Disney. When I researched Disney’s journey into, and out of, gaming for my book Press Play and threw the events on a 30-year timeline, the effect of visualizing Disney’s oscillation between making its own games internally, shuttering studios, licensing its IP so others could make games with it, and back to making its own games was striking.

Disney’s relationship with video games looked like a bipolar relationship. On. Off. On. Off. It’s telling that to this day, arguably the best Disney video game ever made wasn’t made by Disney, but by a studio called Second Dinner that licensed Marvel IP to make Marvel Snap. All of this is not to throw shade at Disney. It’s simply this: making games is hard.

Why Hollywood Has No Choice But to Figure Out Gaming

Yet to thrive in the rapidly changing world of entertainment, the incumbents have no choice but to figure out gaming and how it can play a key part in their strategy and journey towards an immersive entertainment and media organization. Netflix, the streaming leader, understood this long ago when cofounder and former CEO Reed Hastings famously stated that his company’s biggest competitor weren’t other streamers, but a game called Fortnite. That was in the beginning of 2019. Fast forward to today and Netflix has already spent billions of dollars on figuring out a gaming offering for its own service.

If the undisputed leader in streaming is proactively investing in gaming, it begs the question if others in this space even have a choice not to.

I don’t think so.

What a Real Gaming Strategy Actually Looks Like

So what does it mean to have a gaming strategy and to make games a core part of your company? I get asked this exact question a lot and I typically point to a conversation I had with Mastercard CMO Raja Rajamannar for my book because he articulated this point in the context for Mastercard in a way that applies to every organization, better than I could have: Gaming is an always-on initiative. It’s 365 days a year, 24/7.

That’s the foundation. Companies can no longer treat their gaming efforts as singular campaigns that are disconnected from each other and in the worst case from the overall company strategy. That’s not how you get tangible results. Gucci is a company that is a living embodiment of what good looks like here. It has structured its organization within the marketing function in a way where dedicated teams are responsible for dedicated channels and executing, monitoring, tweaking, and planning for each channel individually. 365 days. 24/7. Next to teams that manage Gucci’s Instagram, TikTok, and Facebook strategy are teams that manage Gucci’s presence in Fortnite, Roblox, and Zepeto. Gaming within Gucci sees eye to eye with social media.

Now where are the leading examples within the entertainment industry? I’m convinced that one of those is Paramount-Skydance.

Paramount-Skydance’s Organizational Masterstroke

After the merger, the two companies went to work and restructured the organization immediately. One of the most crucial changes the leadership made was how it positioned gaming internally. Paramount Games as a unit now oversees everything: IP licensing and the studios that make their own games internally. But here’s the biggest change compared to how Paramount Games operated prior to the merger within just Paramount: it is no longer a part of the consumer goods business unit and instead its own business unit that lives next to movies and streaming, as a dedicated content pillar.

At first glance, this might not seem like a big deal. But it is. As a part of the consumer goods organization, games were beholden to the end of quarter numbers and treated the same way you’d treat consumer products, as well as run the same way. Need to lift up the end of quarter sales numbers? Run a promotion or throw in a discount. But games are entirely different products than classic consumer products. Kara Bilkiss, SVP Business Development and Licensing at Paramount Games, said it best in her fireside chat with me in LA: “We’re not making and selling backpacks.”

Games are content and media that engage consumers continuously. This organizational move ensures that gaming not only has a seat at the table but places gaming at the very heart of the entire immersive entertainment strategy going forward.

Why Organizational Structure Matters for IP Consistency

Placing games next to movies and TV organizationally also has another critical added benefit that is paramount (pun intended) to successfully stretching any entertainment IP across multiple screens and consumer touchpoints. While games and movies are cousins (meaning they share DNA), they display some important differences. People that play games tend to be more forward leaning and active, participating in the experience and actively shaping it. Film is a more passive experience and the viewer’s engagement is largely driven by the anticipation the audience feels for what may come in the next scene.

This is why companies can’t simply take a successful movie and copy/paste it into a game, or vice versa. Adjustments have to be made to ensure the IP fits the medium and how people engage with it. Having said that, one of the biggest aspects teams that work in this space are desperate to get right each time is this: consistency.

If the IP doesn’t feel consistent across different mediums, it doesn’t stand a chance to become a world that consumers can traverse across different screens and devices. To ensure this consistency, the people involved in these projects need to understand which aspects of the IP drive immersion for the audience, honor those (make sure every representation is maximally authentic), and identify the core tenets of the IP and stay true to them throughout. By putting games next to movies and TV, Paramount-Skydance is giving itself every chance to get this aspect right.

The Warner Bros. Discovery Battle and What Comes Next

It’s clear that Paramount-Skydance is serious about becoming an entertainment company of the future and winning. The ongoing battle for Warner Bros. Discovery is more than enough evidence. In the latest twist in this saga, WBD’s board rejected Paramount-Skydance’s offer as “inadequate” and “inferior” to Netflix’s offer.

Instead of digging into the details of the offer and whether or not WBD’s assessment is correct, I’d want to turn our attention to what Paramount-Skydance could, and maybe should, do if it doesn’t win the fight with Netflix. Because if they’re willing to spend more than $100 billion, it’s safe to assume that the money will be spent elsewhere.

Consolidate streaming downstream. The company needs to increase subscriber numbers in order to be able to compete with the scale of Netflix as well as Disney+. Buying up smaller streamers like MUBI, Starz, or making an offer to Comcast for its streaming service Peacock would bring together smaller services under one roof to establish a competitive subscriber base.

Acquire independent entertainment companies. Yes, Warner Bros. is a storied company and the idea of owning both water towers in Hollywood is romantic. But if it doesn’t pan out, the company should increase its production capabilities for high-end content regardless. A24 comes to mind, the studio behind smash hits like Euphoria, Midsommar, Everything Everywhere All At Once. See-Saw Films is another (they make the fantastic show Slow Horses). There are ways for Paramount-Skydance to achieve the same goal without WBD.

Go BIG on gaming. Yes, WBD has Warner Bros. Games and it has some very good talent and four franchises that have each made $1 billion in lifetime revenue. It is also true that the gaming revenue for WBD declined over the past 24 months and the teams are struggling to deliver another hit. With all due respect, there are stronger gaming assets in the market that potentially fit Paramount-Skydance’s vision even better.

One of these companies is Take-Two Interactive. Owners of Rockstar (who make GTA), Zynga (the mobile games developer and publisher), and many more. Take-Two currently has a market cap of roughly $46 billion. Even if we assume a 50% markup on the current stock price, that would mean a $69 billion offer could land Paramount-Skydance GTA, Words with Friends, Farmville, and incredible publishing skills across all platforms. Especially with respect to GTA, GTA VI coming out in 2026, and the rumors regarding its anticipated UGC elements and creator economy focus (which would pit GTA directly against Fortnite and Roblox), this move would give Paramount-Skydance an open world universe that could become a playground for all of its entertainment IP.

I personally love the idea of this. And at $69 billion, there’s still plenty of cash left over to execute on the above.

The Stakes Are Clear

Paramount-Skydance has already done the hard work internally. They’ve restructured gaming from a consumer products afterthought into a core content pillar. They understand that gaming isn’t a campaign, it’s an always-on strategy that sits alongside movies and streaming as a fundamental part of modern entertainment.

Whether they win Warner Bros. Discovery or pivot to alternatives like Take-Two Interactive, one thing is certain: the companies that figure out how to make gaming a genuine part of their DNA will define the next era of entertainment. Those that don’t will be left wondering why their IP isn’t reaching audiences where they actually spend their time.

The playbook has been rewritten. Now we’ll see who has the courage to follow it.

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